What I have been saying about Twitter over the last month came true in Fubo’s Q4 earnings—it was a bloodbath. But it was far from surprising.
Am I worried? Not at all. Is this a buying opportunity? Of course.
Let’s break it down and explain what happened and what’s going to happen next.
The Game-Changing Merger
Fubo and Disney decided to settle their lawsuit by merging—a complete game changer.
The problem? Mergers take time and require regulatory approval. As a result, Fubo had to pivot.
I’m not going to focus on Q4 earnings because, frankly, they don’t matter in the bigger picture.
Univision Dispute and Subscriber Impact
Fubo had a contract dispute with Univision and ultimately walked away from negotiations. Due to this, Fubo is projected to lose subscribers,—just as I’ve been saying for a while, but it’s not a big deal. Right now, Fubo’s primary goal is profitability, and the only way to achieve that is by dropping packages that don’t make financial sense.
Growth isn’t the priority at the moment—survival until the merger is. Every move Fubo makes from now until regulatory approval will be with that in mind. As a result, things will be pretty uneventful for Fubo in the short term (maybe a year on out from now).
Playing It Smart
The strategy is simple: lay low, stay humble, and let the merger go through. As CEO David Gandler has already acknowledged, they can’t openly discuss it, which is the right approach.
This lack of hype will likely keep the stock price suppressed, as we’ve already seen. But that’s fine by me.
Reduced Marketing Spend
Fubo has also cut back on marketing spend, which is interesting because it’s likely they wouldn’t have reached profitability even if they hadn’t, even though they said they would have (I think Discovery and Univision renewals threw a wrench into those plans). They’ve more or less stopped talking about profitability altogether. This also explains why John Janedis, the guy in charge of financials, has been consistently selling shares over the last few years.
But let me remind you—none of this matters. Once the merger happens, they’ll restructure all contracts, and that’s when real innovation will begin. The plan is to avoid further dilution and stay the course until the merger. If that means only servicing Disney and Fox content for now, that’s what they’re going to do to prevent unnecessary damage to the business.
Short-Term Outlook: Boring but Strategic
Yes, things will be boring until the merger, but that also presents an opportunity to average down.
Would Univision have helped grow subscribers? Sure. But at this stage, profitability takes precedence over subscriber count.
Other Interesting Tidbits:
- Fubo added the Zee Family package (South Asian channels) alongside Willow TV (Cricket channel added almost a year ago). This can be subscribed to as a standalone package. This was emphasized by David, where they will add packages that make financial sense. Even if they are non-sports programming.
- The “Team News” AI feature has gained a lot of popularity. David Gandler compares it to MultiView.
- Fubo has significantly reduced marketing spend.
- Most AI-driven initiatives seem to be on hold due to cost concerns, except for Team News.
Final Thoughts
For now, stay the course. Don’t trade options on this stock—just be patient. The hardest part is already done. Fubo pulled off the unthinkable and won the lawsuit. Now, it’s just a waiting game until the merger is finalized.
For those who want to know everything about the Hulu Live and Fubo merger, please follow this page, which will be continually updated:
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