Back when Disney purchased 20th Century Fox in 2019, it made an agreement with Comcast that saw Disney assuming full operational control of Hulu, effective immediately, in return for Disney and Comcast entering into a “put/call” agreement regarding NBCUniversal’s 33% ownership interest in Hulu.
This initial put/call agreement, was set to take place as early as January 2024, which would allow Comcast to force Disney to buy NBCUniversal’s interest in Hulu or allow Disney to force NBCUniversal to sell that interest to Disney for its fair market value that independent experts will assess but Disney has guaranteed a sale price for Comcast that represents a minimum total equity value of Hulu at that time of $27.5 billion. There was also an agreement that saw Comcast’s stake in Hulu reduced if it didn’t maintain paying its share of Hulu’s cost, down to a minimum stake of 21%.
According to THR, Comcast CEO Brian L Roberts, the date for sale has been changed and will now come into force from September 30th 2023, just before the end of Disney’s financial year.
Brian was speaking at the Goldman Sachs Communacopia and Technology Conference. and said that the date was brought forward last week, and a modification has been signed to the company’s current agreement. “So as of September 30, after some short period of time, Disney can call”. He explained that it will take roughly 30 days.
“It will take a little time for this to play out. But both companies wanted to get it behind us, so we pulled the date forward,”
While the initial valuation was set at around $27.5 billion, Comcast is hoping that that valuation will be much higher, around $30 billion. So even at the minimum of 21%, that could be over $6 billion dollars for Comcast’s Hulu stake.
“I think we are excited to get this resolved and the minimum of $27.5 billion, that was just a hypothetical we picked out five years. The company is way more valuable today than it was then.
We’ve seen analyst reports that a buyer, depending on who they were, if it was to scale them up, they could have a couple billion dollars, or who knows what, of synergy. Just that piece of the synergy and the churn benefit could be worth $30 billion. And that’s before you ascribe any value to the actual Hulu. And of course when you go into one of these really robust auctions– and I think if you were selling all of this as is, there’d be a line of bidders around the block to actually buy all the content, all the bundling of Hulu, that that business we’ve never seen. And so usually buyers in robust auctions pay for it all, and the seller gets all the benefits of the synergy.”
Comcast is planning on using the money from the sale of Hulu to give back to shareholders, pay taxes and invest in meta bond financing.
Earlier this year, Disney CEO Bob Iger revealed that he was planning on adding Hulu content into Disney+ by the end of the year and would eventually merge the two platforms. With Disney and Comcast making this new agreement, it looks like this chapter of Hulu’s ownership is coming to a close, and Disney is set to get full control over Hulu much sooner than expected. Allowing Disney+ and Hulu to finally come together to offer a full streaming experience to US subscribers, like how Disney+ does internationally!
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Roger has been a Disney fan since he was a kid and this interest has grown over the years. He has visited Disney Parks around the globe and has a vast collection of Disney movies and collectibles. He is the owner of What's On Disney Plus & DisKingdom.