In 2024, Disney will be able to force Comcast to sell its 33% stake in Hulu following a contract made in 2019 after the purchase of 20th Century Fox. Comcast’s stake is contractually set to be worth a minimum of $9 billion, though this could be reduced to $5.8 billion if Comcast hasn’t been investing in Hulu over the past few years. However, an independent valuation will have to be done to determine Hulu’s value.
Earlier this month, Disney CEO Bob Iger revealed during an interview with CNBC (owned by Comcast), that they would be buying out Comcast’s stake in Hulu, as agreed and are planning on merging it with Disney+. But they were also looking for a strategic partner for its ESPN business. This led many to speculate that Comcast and Disney could come to an agreement to trade a percentage of ESPN for Hulu.
During a recent second-quarter investors conference call, Comcast was asked about swapping assets for ESPN and President, Mike Cavanagh said that it was ‘Very improbable’ that company would swap Hulu stake for a piece of ESPN.
“I’ve been asked about and read about speculation that in some way we might be interested in swapping businesses as part of what’s going on in the sports space, and I would just say that that’s very improbable.
As you’d imagine, there are tremendous issues around tax, minority shareholders and structuring generally. So, I would put aside the probability that there’s anything inorganic that’s likely to happen around ESPN in particular.”
Hopefully, Disney and Comcast can come to an agreement over Hulu soon, so subscribers can have a clearer idea of what is going to happen, but for now, the idea of swapping Comcast’s stake in Hulu for a stake in ESPN seems unlikely, as its a much more complicated situation than many people realise. These comments might put a small pin in the idea of Comcast owning part of ESPN, but no doubt, they will welcome any additional income from selling their stake in Hulu within the next six months or so.
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