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Disney said on Monday it would merge its Hulu + Live TV business with rival FuboTV — a deal that potentially clears the way for the launch of its stalled sports streaming venture with Fox Corp and Warner Bros Discovery.

The merged company will create the second-biggest online pay-TV provider in North America, behind YouTube TV, with around $6 billion in revenue and 6.2 million subscribers.

Disney, led by Bob Iger, will hold a 70% majority stake in the venture, which will be led by Fubo CEO and co-founder David Gandler.

As part of the deal, Fubo asked the US District Court in Manhattan on Monday to drop its lawsuit against the media giants behind Venu Sports, the sports bundle that was supposed to launch last fall.

Under the litigation settlement, the companies will pay Fubo $220 million in cash, with Disney also committing to a $145 million term loan for Fubo in 2026.

“Disney’s tie-up with Fubo looks like a way of resolving a legal spat as part of its efforts to get a sports venture with Fox and Warner Bros off the ground,” said Dan Coatsworth, an investment analyst with AJ Bell.

“It’s a step forward, but there are still more hurdles to clear to get the Venu Sports service operational.”

Spokespeople for Warner Bros Discovery and Fox declined comment.

Shares of Fubo, which had a market value of about $480 million as of its Friday close, surged 251% to $5.06. Disney was down marginally.

The deal does not include the streamer Hulu, home to original series like “Only Murders in the Building” and “The Handmaid’s Tale,” which competes with platforms like Netflix, Amazon Prime Video and Apple.

Nonetheless, the new venture will give customers the ability to stream a broad array of live broadcast and cable networks on their connected TVs, mobile phones, tablets, and other internet-connected devices.

“This combination enables us to deliver on our promise to provide consumers with greater choice and flexibility,” Gandler said of the merger.

“Additionally, this agreement allows us to scale effectively, strengthens Fubo’s balance sheet and positions us for positive cash flow. It’s a win for consumers, our shareholders, and the entire streaming industry.”

Hulu + Live TV will continue to be streamed in the Hulu app and be offered as part of the bundle with Hulu, Disney+ and ESPN+. Fubo, which streams more than 55,000 live sporting events annually, will continue to serve its subscribers in the Fubo app.

The deal ends a bitter legal battle that had blocked Disney, Fox and Warner Bros. Discovery from launching its own sports-focused streaming provider.

FuboTV, in its lawsuit filed against the three companies last February, had accused Venu’s partners of engaging in anti-competitive practices that would thwart competition for sports fans.

At issue was a practice known as “bundling,” in which TV distributors like Fubo are forced to carry networks that “consumers rarely watch” to gain rights to prized live sports programming. Fubo argued it was unable to gain the rights to create a sports-centric service, in the mold of Venu.

As part of Monday’s announcement, Disney will also enter into a new carriage agreement with Fubo that will allow Fubo to create a new sports service featuring Disney’s sports and broadcast networks including ABC, ESPN, as well as ESPN+.

“The new product will be publicly traded under the Fubo name and run by its CEO,” said Ross Benes, senior analyst at Emarketer. “That signals Disney is looking to eventually get out of being a pay TV operator and go all-in on streaming.”

The deal includes a termination fee of $130 million.

With Post wires