Disney’s long-running dispute with Comcast over the final valuation of Hulu continues to be a problem for Disney, with the two companies still locked in negotiations over the final valuation of Hulu, of which Disney owns two-thirds and Comcast owns a third.   

The two companies agreed last year that Disney would purchase Comcast’s remaining stake in the streaming service Hulu as part of a put/call agreement placed in a deal between them in 2019 when Disney purchased 20th Century Fox, which would mean in 2024, Comcast or Disney could force Disney to buy out Comcast’s stake, for a fair market value, which would be a minimum of $27.5 billion.    The valuation will be assessed as of September 30th 2024, with both companies hiring different companies to value Hulu, with Disney hiring JP Morgan and Comcast hiring Morgan Stanley. 

JP Morgan has valued Hulu at $27.5 billion, while Morgan Stanley has valued Hulu at more than $40 billion.  Because the valuations are more than 10% apart, a third independent party, RBC Capital, has been brought in to calculate the value of Hulu, and that would determine how much Disney would have to pay.

Last year, Disney paid Comcast over $8.61 billion as an initial payment for Comcast’s stake while the final valuation was being worked out.

Disney’s latest SEC filing for its quarterly financial results provided some more details on the current situation, stating that in May 2024, the Company and NBCU entered into a confidential arbitration to resolve a dispute regarding the contractual appraisal process, in which the parties seek declaratory relief, equitable relief and unspecified damages.

Disney is expecting a decision in that arbitration in fiscal 2025, which means we are unlikely to see any more major changes to how Hulu operates until this is finalised, ie, merging Disney+ and Hulu together.

The outcome of the arbitration is uncertain, and Disney is in a stalemate situation until Hulu’s equity fair value is determined. Disney may be required to pay anything between zero and approximately $5 billion more to finally acquire NBCU’s interest in Hulu.

Roger’s Take:  The long-running dispute over the future of Hulu continues to roll on and looks unlikely to change anytime soon since Comcast is just holding out for more money, and Disney wants to pay as little as possible.  Hopefully, the two can reach an agreement soon since we are in a very weird place where Disney can’t fully merge its two entertainment streaming services since it doesn’t technically own Hulu yet.  

It’s why Disney is doing this very weird and slow blending over the two platforms, without actually saying what’s happening.  Even down to how Hulu On Disney+ is rarely promoted or mentioned, since they can’t take advantage of the situation just yet.   Either way, it’s likely Disney is going to have to hand a couple of billion dollars over to Comcast to settle this once and for all.

Do you think Hulu is going to cost Disney more money?  Let me know on social media!

Roger Palmer

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. Email: Roger@WhatsOnDisneyPlus.com Twitter: Twitter.com/RogPalmerUK Facebook: Facebook.com/rogpalmeruk

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