Disney to Buy Remaining Stake in Hulu From Comcast

The landscape of streaming services is about to change once again. On Wednesday, it was announced that The Walt Disney Company will be acquiring the 33% stake that Comcast’s NBCUniversal currently owns in Hulu. This deal is in motion after Comcast exercised its right under the put/call arrangement between the two companies. The pending deal is expected to be finalized by December 1st, and will see Disney tentatively paying NBCUniversal $8.61 billion. Disney and Comcast have been in their current agreement over Hulu since 2019, 

“Under the terms of the put/call arrangement, by December 1, Disney expects it will pay NBCU approximately $8.61 billion, representing NBCU’s percentage of the $27.5 billion guaranteed floor value for Hulu that was set when the companies entered into their agreement in 2019 minus the anticipated outstanding capital call contributions payable by NBCU to Disney,” the announcement reads in part. “Under the appraisal process agreed to by Disney and Comcast, Hulu’s equity fair value will be assessed as of September 30, 2023, and if the value is ultimately determined to be greater than the guaranteed floor value, Disney will pay NBCU its percentage of the difference between the equity fair value and the guaranteed floor value. While the timing of the appraisal process is uncertain, we anticipate it should be completed during the 2024 calendar year.”

Will Disney+ and Hulu Merge?

The fate of Hulu in Disney’s portfolio has been speculated about a lot as of late, with rumors suggesting that the streaming service would be merged with the company’s all-ages streaming service, Disney+. Earlier this year, Disney CEO Bob Iger confirmed there are plans in the works to offer the services in a bundle, although an exact date for that has yet to be set.

“While we continue to offer Disney+, Hulu, and ESPN+ as standalone options, this is a logical progression of our DTC offerings that will provide greater opportunities for advertisers, while giving bundle subscribers access to more robust and streamlined content, resulting in greater audience engagement and ultimately leading to a more unified streaming experience,” Iger explained.

Will Disney Sell Its Networks?

Earlier this year, Iger also indicated that although the company does not hope to sell its stake in ESPN or Hulu, it might be open to making sales for some of its linear cable networks, such as ABC, FX, and Freeform.

“We’re going to be open minded there too, not necessarily about spinning ESPN off, but about looking for strategic partners that can either help us with distribution or content,” Iger said. “But we want to stay in the sports business. Sports is very, very attractive media and we have a unique position and we feel that we should stay in it.”

“Over time when I came back, I was open minded about Hulu because there is this agreement with Comcast that actually calls for a transaction, their stake to us, sometime in 2024 and I didn’t want that to be an automatic. I wanted to look at that objectively,” Iger explained. “I spent a lot of time looking at that as part of the future of our streaming business and ultimately concluded that we would be better off having Hulu than not having Hulu.” 

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