FUBO Deep Dive: The Best Arbitrage Play Out There

Co-written by the Smartfin Team and @YodaStocks

New to terms like revenue growth, Price-to-Sales, or market cap? If you’d like a quick refresher on the essential metrics we’ll reference below, read our primer: Essential metrics every new investor should understand before buying stocks .

Streaming has become a battlefield, but few players are positioned as uniquely as Fubo (FUBO). Known for its sports-first DNA, Fubo carved out a niche in a crowded market dominated by giants. Now, with the proposed Disney/Hulu Live TV merger on the table, the company finds itself at the center of a potentially transformational deal. This deep dive explores how skinny bundles could reignite subscriber growth, why profitability may finally be within reach, and what different 2026–2028 scenarios could mean for valuation. From deal mechanics and timelines to market positioning and risk factors, we’ll examine why FUBO could be one of the most asymmetric arbitrage opportunities in streaming today—and what investors should watch most closely in the months ahead.

Introduction for New Investors

If you’re just discovering Fubo, here’s the quick backdrop: the company started as a sports-first streaming platform but has steadily expanded into a broader live TV offering. Unlike Netflix or Disney+, which are on-demand, Fubo competes in the “skinny bundle” space - offering a cable-like experience at a fraction of the price. Historically, concerns over profitability weighed heavily on the stock, but with scale, improved deal economics, and the potential Disney/Hulu Live TV merger, the investment case is shifting rapidly.

Image by: The Wall Street Journal

Before we delve into the specifics of the deal, let's take a look at FUBO's stock price in the last year, as seen in Smartfin. You can easily spot the date of the deal announcement:

FUBO price chart, as seen in Smartfin - earnings and insider trades are also visible.

The Deal

The proposed Disney-Fubo deal is structured as a strategic merger designed to combine the scale, content portfolio, and distribution of Disney’s streaming ecosystem with Fubo’s advanced live TV technology and loyal subscriber base. Rather than a traditional acquisition, this deal positions both parties to benefit from shared economics, with Fubo maintaining operational control under its existing management team. Below is a breakdown of the key deal terms and structure as disclosed so far:

Term	Detail
Ownership at closing	Disney ~70% / Fubo ~30%
Upfront cash payment	$220 million (aggregate from Disney, Fox, WBD)
Committed term loan	$145 million from Disney (in 2026)
Termination (break) fee	$130 million payable to Fubo under specified conditions
Management / structure	Combined vMVPD operates under Fubo; existing Fubo leadership continues
Product availability	Fubo and Hulu + Live TV remain available as separate offerings post-close
Combined subs (NA)	~6.2 million (at announcement)

Milestone	Status / Window
Definitive agreement announced	January 6, 2025
Shareholder approval (Fubo)	Approved September 30, 2025
Expected closing window	Q4 2025 – Q1 2026 (subject to regulatory approval & customary conditions)

The following infographic of the deal structure and its economics - as provided by the official sources - is also helpful:

When could the merger close?

Key timing insights
At announcement (Jan 2025), guidance was 12–18 months.
That implies potential closing between January 2026–June 2026 (if approved).
The stock likely moves earlier as clarity improves - waiting until Jan 2026 could be late.

Odds the Deal Goes Through

While regulatory uncertainty always looms over large-scale media consolidations, several structural and political factors make this one far more feasible than skeptics assume. In contrast to a traditional acquisition, the Disney–Fubo transaction is being framed as a strategic merger, preserving competition in the live-TV streaming space while aligning incentives across content owners and distributors.

Precedents also favor approval. The Charter–Cox merger (valued at roughly $34.5 billion) demonstrated that vertical integrations within the pay-TV ecosystem can pass antitrust scrutiny when consumer choice and market access are maintained. Combined with a deal-friendly regulatory stance from the current administration, this environment is notably more conducive to consolidation than it was just a few years ago.

Also keep in mind: this is not a Disney takeover, but rather a collaborative effort to stabilize a challenged but important segment of streaming. The partnership could help Disney better monetize Hulu’s live-TV infrastructure while giving Fubo a path to profitability it likely couldn’t achieve alone.

Our estimate: 80–90% chance of approval (not legal advice).

2026–2028 Outlook (shared by Fubo)

Fubo’s management has laid out preliminary financial expectations for the combined entity, offering a glimpse into the potential revenue contribution under different ownership scenarios. Assuming the merger proceeds as structured - with Disney holding roughly 70% and Fubo 30% - the economics look meaningfully accretive to Fubo’s top line.

Year	Total revenue	Attributable to Fubo (30%)
2026	$6.5B–$7.0B	$1.95B–$2.1B
2027	$7.0B–$7.5B	$2.1B–$2.25B
2028	$7.5B+	$2.25B+

For a company currently valued around $1.3B, these projections underscore the magnitude of leverage inherent in the deal. Execution risk remains high, but the potential upside is equally striking.

Image by: Fubo Investor Relations

Market Position Post-Merger

If the deal closes, the combined platform would vault Fubo from a niche sports streamer into a top-tier live-TV player. Subscriber count would rise from roughly 1.6 million to 6.2 million, propelling Fubo from 11th to 6th place in the broader Pay TV landscape. More importantly, the content mix would expand beyond sports to include a richer slate of entertainment, family, and news programming - critical for reducing churn and broadening appeal.

P/S Valuation Post-Merger

Valuation is where the story gets compelling. Most streaming peers trade between 3–5× P/S (price-to-sales), while Fubo currently sits below 1×. Even a modest re-rating to 2× P/S on 2026–2028 revenue would imply a multi-bagger scenario if the integration and profitability trajectory hold.

Metric	Value
Current Market Cap	~$1.3B
2026 Revenue (Fubo share)	$1.95B–$2.1B
2028 Revenue (Fubo share)	$2.25B+

On that math, even conservative valuation multiples produce a 3–4× potential upside over the next three years. The key will be demonstrating sustained subscriber growth and cost discipline once the merger synergies kick in.

Scenario Projections (2026–2028)

To make the range of outcomes clearer, here are three straightforward scenarios. These are not forecasts—just guides to help frame potential paths depending on whether the merger closes and how growth/margins evolve.

Bear Case (merger fails; slow growth)

If the merger collapses and competition stays intense, Fubo likely follows its standalone path with low single-digit growth and a discounted valuation.

Metric	Outcome
Revenue trajectory	$1.53B (2025) → $1.77B (2028) (about +5%/yr)
Valuation multiple	1× Price-to-Sales
Implied value	~$1.77B Market Cap
Approx. share price	~$5.3/share

Base Case (merger closes; steady integration)

The deal closes and integration is orderly. Revenue expands modestly and the market assigns a middle-of-the-road streaming multiple as profitability improves.

Metric	Outcome
Total revenue (combined)	$6.5B (2026) → $7.16B (2028)
Revenue to Fubo (30%)	~$2.15B (2028)
Valuation multiple	3× Price-to-Sales
Implied value	~$6.44B Market Cap
Approx. share price	~$18.8/share

Bull Case (merger closes; growth accelerates)

Integration works well, growth re-accelerates, and investors award a premium multiple similar to top streaming peers.

Metric	Outcome
Total revenue (combined)	$6.5B (2026) → $7.86B (2028)
Revenue to Fubo (30%)	~$2.36B (2028)
Valuation multiple	5× Price-to-Sales
Implied value	~$11.8B Market Cap
Approx. share price	~$34.6/share

Why We Like the Setup

For investors willing to stomach volatility, the setup here is unusually asymmetric. Fubo remains small enough that a single catalyst - a merger close, a strong earnings print, or a surprise profitability quarter - could re-rate the stock dramatically. At the same time, even in a failed-deal scenario, the downside appears limited relative to the upside potential.

We wouldn’t go all-in given execution and macro risks, but a 10–20% position feels appropriate for those looking to capture a rare blend of fundamental inflection and structural leverage. Fubo’s risk/reward profile today resembles early-stage Netflix or Roku in its transition years - a speculative, but potentially generational, setup.

Image by: Reuters/Carlo Allegri

Disclaimer: This guide is for educational purposes only and is not investment advice. Do your own research and consider your financial situation and risk tolerance.