It looks like NBCUniversal has thrown in the towel on buying Hulu back from Disney, and instead hopes to get as big a payday as possible in order to hand over their share of the streamer. Originally started as a multi-network partnership, Disney acquired majority control of Hulu as part of their acquisition of 20th Century Fox and its entertainment assets. Now, Disney holds 2/3 of the streaming platform, with NBCUniversal in control of the other third. And due to a contract between them, Disney can be compelled to buy out NBCUniversal’s interest in Hulu as early as January 2024.
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In its most recent fiscal year, Disney’s direct-to-consumer unit — which includes Disney+, Hulu, and ESPN+ — lost $4 billion. And Hulu’s minimum purchase price, per the deal reached between Disney and Comcast in 2019, is a little over $25 billion.
“We have a put, they have a call,” NBCUniversal CEO Jeff Shell said at an investor conference on Monday (via Yahoo! Finance). “We think [Hulu] is worth a lot of money because it’s sold on a full control basis as if you were auctioning it off. And I think [there are] no indications that anything else is going to happen [other] than Disney writing us a big check for the asset in 2024.”
In September, reports emerged that former Disney CEO Bob Chapek hoped to move up the purchase date, but to do so at a reduced price. That would have provided Disney with total control of Hulu, allowing them to make strategic choices around the brand on their own terms, but Comcast CEO Brian Roberts said that he would rather buy Disney’s share of Hulu instead. It is not clear whether he really meant that, or whether the comments were designed to send a message to Chapek that Comcast would hold Disney to their current obligations. Not long after, rumors emerged that Comcast might be interested in acquiring Warner Bros. Discovery, which has lost over $20 billion in market cap since new management took over earlier this year and made a series of unpopular moves.
A weak global economy has put pressure on business models that accept short-term losses as necessary to long-term growth. That is streaming in a nutshell, and some analysts think Disney would be better off selling Hulu altogether. Who the buyer might be is another question, since most of the companies that would be likely to drop tens of billions on a streaming platform, are currently struggling with profitability on the ones they already own.
“They’ve got some tough hands, and it takes a lot of capital to be in that business,” Disney CEO Robert Iger recently said of the competitive streaming market. “I don’t think they’ll all make it.”
