Disney to Buy Full Control of Hulu in Deal With Comcast

Disney has agreed to take full control of Hulu in a deal with Comcast, which has owned a third of the streamer ever since Disney’s acquisition of the 21st Century Fox entertainment assets.

“The acquisition of Comcast’s stake in Hulu at fair market value will further Disney’s streaming objectives,” the Bob Iger-led company said in a statement Wednesday.

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A securities filing confirmed that NBCUniversal triggered the purchase earlier in the day.

“We look forward to the appraisal process and the determination of Hulu’s fair market value which we expect will reflect the extraordinary value of the business,” Comcast said in a statement.

Wall Street has over the past year repeatedly discussed Hulu’s future due to its shared ownership and put and call options. Starting in November, Comcast has had a put option to require Disney to take over its stake, while Disney has had the right to tell Comcast to sell it its stake. As per an agreement between the two companies, Hulu was set to get a fair market value assessment from independent experts, but the guaranteed minimum Hulu valuation of $27.5 billion means that Disney knew it had to cough up at least $9 billion.

In the filing Wednesday, Disney said that it expects to pay $8.61 billion by Dec. 1 (meeting the floor valuation), though it will go through the appraisal process to make the final determination of Hulu’s value, and how much (if any) the company will need to pay beyond the $8.61 billion number.

“While the timing of the appraisal process is uncertain, we anticipate it should be completed during the 2024 calendar year,” Disney said.

Disney CEO Iger has signaled that he wants to refocus the company on its beloved content brands from Pixar and Marvel to Lucasfilm, including family and kids fare. Asked on CNBC in February 2023 what that meant for Hulu, he said: “Everything is on the table right now, so I am not going to speculate whether we are a buyer or a seller of it. But I obviously have suggested that I’m concerned about undifferentiated general entertainment [content], particularly in the competitive landscape that we are operating in.”

MoffettNathanson analysts Craig Moffett and Michael Nathanson tried to read between the lines, writing in a report back then: “Disney CEO Bob Iger was notably noncommittal about Disney buying. And he was notably evasive about Disney selling. Comcast has been characteristically silent. Let the speculation begin.” But he and most other analysts have since seen Comcast as the natural seller of its Hulu stake.

Roberts said at an annual Goldman Sachs event earlier this fall that triggering the option was very likely.

In July, Moffett and Nathanson forecast Hulu would add roughly 2.0 million subscribers a year “to reach 55.2 million subscribers by 2026,” including 49.7 million SVOD users, the rest Live TV+SVOD customers. “We expect Hulu to reach $14.1 billion in revenues in fiscal year 2026.”

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