Disney has announced that it will buy out Comcast’s 33% stake in Hulu, the popular streaming service, for an estimated $8.61 billion. The deal, which was finalized on November 1, 2023, gives Disney full ownership and control of Hulu and its content library.
Disney and Comcast had entered into a put/call agreement in 2019, which gave Comcast the option to sell its stake in Hulu to Disney at a predetermined price. The price was based on a guaranteed floor value of $27.5 billion for Hulu, minus any capital contributions that Comcast owed to Disney. However, the final price could change depending on an appraisal process that will determine Hulu’s fair market value as of September 30, 2023. If the appraisal shows that Hulu is worth more than the floor value, Disney will pay Comcast the difference.
The acquisition of Hulu is part of Disney’s strategy to expand its streaming presence and compete with rivals like Netflix and Amazon Prime Video. Disney already owns Disney+, its flagship streaming service that offers content from its iconic brands such as Marvel, Star Wars, Pixar, and National Geographic. Disney also owns ESPN+, a sports streaming service that covers live events and original shows. With Hulu, Disney will have access to a broader range of content, including original series like The Handmaid’s Tale, Castle Rock, and The Act, as well as licensed shows and movies from NBCU, Fox, ABC, and other studios.
Disney plans to operate Hulu as a separate service from Disney+ and ESPN+, but it may offer bundle deals or cross-promotions to attract more subscribers. Disney also intends to invest more in Hulu’s original programming and expand its international availability. Currently, Hulu is only available in the US and Japan, but Disney hopes to launch it in more markets in the future.
Hulu was founded in 2007 as a joint venture between NBCU, Fox, and Disney. It started as an ad-supported service that offered catch-up episodes of broadcast TV shows. Over time, it added more content partners, subscription options, live TV channels, and original shows. In 2019, Disney acquired Fox’s 30% stake in Hulu as part of its $71 billion deal for Fox’s entertainment assets. This gave Disney a 60% stake in Hulu, while Comcast retained 30% and AT&T sold its 10% stake back to Hulu. Now, with Comcast’s exit, Disney has become the sole owner of Hulu and its 42 million subscribers.
The Full Press Release is Below:
The Walt Disney Company to Purchase Remaining Stake in Hulu from Comcast
The Walt Disney Company (NYSE: DIS) announced today that it will acquire the 33% stake in Hulu, LLC held by Comcast Corp.’s (NASDAQ: CMCSA) NBC Universal (NBCU), following Comcast’s November 1 exercise of its right under the put/call arrangement between the two companies. The acquisition of Comcast’s stake in Hulu at fair market value will further Disney’s streaming objectives.
Under the terms of the put/call arrangement, by December 1, Disney expects it will pay NBCU approximately $8.61 billion, representing NBCU’s percentage of the $27.5 billion guaranteed floor value for Hulu that was set when the companies entered into their agreement in 2019 minus the anticipated outstanding capital call contributions payable by NBCU to Disney. Under the appraisal process agreed to by Disney and Comcast, Hulu’s equity fair value will be assessed as of September 30, 2023, and if the value is ultimately determined to be greater than the guaranteed floor value, Disney will pay NBCU its percentage of the difference between the equity fair value and the guaranteed floor value. While the timing of the appraisal process is uncertain, we anticipate it should be completed during the 2024 calendar year.The Walt Disney Company