Comcast “More Likely Than Not” To Sell Hulu Stake To Disney
Earlier this year, Disney CEO Bob Iger said that everything was on the table, with regards to the future of Hulu, and potentially selling it. But following the news that Disney is planning on making Hulu an add-on to Disney+, to provide subscribers with a one-app experience, there has been lots of speculation about Disney buying out Comcast’s remaining 33% stake in Hulu.
This week, during a MoffettNathanson TMT conference, the CEO of Comcast, Brian Roberts has said that it’s “more likely than not” that it would be selling its stake in Hulu to Disney.
“I think it’s more likely than not that we go through with what we said all along. That … they’ll put, we’ll call at the beginning of next year. I think Disney recognized as anybody else would recognize that Hulu is really valuable”.
“The fact is that Bob Iger, on his earnings call last week, said that they’re now back interested in general entertainment, which is no surprise,”
Disney and Comcast made an agreement in 2019, when Disney doubled its ownership stake in the streaming service when it purchased 20th Century Fox. The agreement stated that Disney would gain operational control of the platform, and in 2024, either company could request that Disney buys out its stake for its fair market value at that future time. Independent experts will assess Hulu’s fair market value, 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. Though if over the years, Comcast doesn’t continue to invest in Hulu, it would have its stake reduced, though it will never be less than 21%, which means that Comcast is guaranteed to receive at least $5.8 billion under the put/call agreement.
During the conference, Brian spoke about the deal, as they obviously want the valuation to be more than it currently is and how much someone would be willing to pay for Hulu, such as in an auction:
“And it’s sort of a hypothetical question,” since there’s never been an asset like this for sale — a platform with more than 50 million Hulu domestic streaming subscribers, “all the content from Disney and Fox. And so what’s worth to any buyer, including Disney? We’re including Comcast, we’re including other tech companies, or whomever. And that’s what the job is…to give us one-third of that value. I think we have a very valuable position.”
With Disney now setting out a roadmap to offer a single app experience through Disney+, but still keeping Hulu separate at the moment, it is all down to the fact that Disney doesn’t still own all of Hulu. Hence why a full merger of Disney+ and Hulu could be a year or so away, until Comcast’s stake is resolved. Over the next six months, we are likely to see more discussions playing out in the open about the future of Hulu.
Source – Deadline