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Disney is acquiring Comcast’s stake in Hulu. The company will pay Comcast at least $8.61 billion to buy its 33 percent stake in the streaming service. The deal, expected to close in 2024, will give Disney full ownership of Hulu.
Hulu will soon be wholly owned by Disney
Hulu was launched in October 2007 as a joint venture between several media and entertainment houses. Following Disney’s acquisition of 21st Century Fox in March 2019 and WarnerMedia’s sale of its 10 percent stake in Hulu back to the company in April 2019, Disney ended up with a 67 percent majority stake in the streaming service. Comcast’s NBCUniversal held the remaining 33 percent stake.
In May 2019, Comcast agreed to cede its control of Hulu to Disney. The two firms reached a deal with a guaranteed floor value of $27.5 billion, “minus the anticipated outstanding capital call contributions payable by NBCU to Disney.” According to that agreement, Disney will have to pay Comcast $8.61 billion to gain full control of Hulu. However, it may end up paying a little more.
Under the appraisal process agreed to by the duo in 2019, they will evaluate the final equity fair value for Hulu as of September 30, 2023. If the final value turns out to be greater than the guaranteed floor value, which is highly likely, Disney will have to pay the difference to Comcast. The media giant says “the timing of the appraisal process is uncertain” but it expects the acquisition to close sometime next year.
“That was just a hypothetical that we picked five years ago because Disney has control of the company,” Comcast CEO Brian Roberts said about the $27.5 billion valuation of Hulu during an investors call in September. “The company is way more valuable today than it was then.” It remains to be seen how much value the streaming service has added in recent years. Hulu hasn’t gained many new subscribers lately, leading to a price hike and a potential password-sharing crackdown from Disney.
Disney may share more details about this acquisition during its earnings call
Disney and Comcast had originally agreed to begin this sale process in January 2024. They were supposed to evaluate the final value for Comcast’s stake in Hulu early next year. However, earlier this year, the firms decided to move the date to September 30. It’s unclear what prompted this change, but the sale is now officially underway. Disney may share more details about it during its earnings call next week. The company will report its earnings results for the fiscal full year and Q4 2023 on November 8.
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