In just a couple of weeks, on November 1st 2023, Disney or Comcast can finally trigger their options to force Disney to buy out Comcast’s stake in Hulu.
And according to CNBC, (which is owned by Comcast), has revealed that both Disney and Comcast have hired investment banks to value Hulu. Disney has hired JPMorgan Chase to value its streaming service, while Morgan Stanley will do the same for Comcast. The two valuations will then be compared, and if they are within 10%, the average of the two banks’ determinations will be the price at which Hulu is valued, as of September 30th 2023. If they are far apart on their valuation, a third company will be brought in to come up with a final price.
Last month, it was revealed that the two companies had agreed to pull forward the pull/put date on the contract by two months, as both companies want to get the situation resolved after five years since they made a deal following Disney purchasing 20th Century Fox.
Disney has revealed that it’s planning on making some of Hulu’s content available within Disney+ in the United States later this year, as part of a one-app experience and to merge the two apps eventually. Adding Hulu content to Disney+ is expected to boost subscribers and reduce churn, as Hulu content will provide Disney+ with more general entertainment content, similar to how Disney+ operates outside the US.
The contract between Comcast and Disney was made back in 2019, when Disney purchased 20th Century Fox, which resulted in it becoming the majority owner. A deal was made, since Comcast didn’t want to sell Hulu and believed the value of the company was going to be higher in five years. An initial minimum valuation of 27.5 billion dollars was made at the time, though Comcast’s stake in the company may have been reduced due to less investment into Hulu since the deal was made, though its stake in Hulu can’t drop before 21%.
Last month, during a Goldman Sachs’ Communacopia conference, Comcast CEO Brian Roberts said:
“We are excited to get this resolved. The company is way more valuable today than it was [in 2019]. And we are looking forward to seeing how that process [plays out].”
The valuation of Hulu will be difficult to obtain, since if Hulu was sold on the market, a huge core of its value is tied to its connection to Disney, especially its studios like 20th Television, FX and ABC.
No timetable has been given for how long this valuation process will last, but both companies want to get the deal sorted as quickly as possible. As Disney will want to activate its plans for Hulu to be merged into Disney+, and Comcast wants to return value to the shareholders.
Hopefully, we hear about the deal soon, so the Hulu and Disney+ merger can finally begin.
Are you looking forward to when Hulu content becomes available within Disney+? Let us know on social media!
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.