- The deal hinges on an evaluation process to determine Hulu’s fair value as of Sept. 30, which could result in Disney paying more to Comcast.
- Disney and Comcast have reached an agreement for Disney to pay Comcast for Hulu content over the next five years.
- NBC channels will have a presence on Hulu Live and Comcast’s own upcoming streaming service.
Disney will take full ownership of Hulu by buying the rest of Comcast’s stock. The entertainment giant announced on Wednesday that it “expects to pay” $8.61 billion for Comcast’s 33 percent stake in Hulu.
Also read: Disney forms AI task force: exploring cost savings and AI integration for a magical future
A slow but sure march to full ownership
In April 2009, Disney announced that it had joined Hulu as a shareholder. In late 2017, Disney announced the acquisition of Fox, and Fox’s 30% stake in Hulu went to Disney. In May 2019, Disney signed a deal with Comcast that gave Disney full control of Hulu.
As Disney sets itself up to full ownership, the final price remains undetermined. Both Disney and Comcast have agreed to an evaluation process to determine Hulu’s fair value as of Sept. 30. If Comcast’s shares are determined to be “above the guaranteed minimum value,” Disney will have to pay Comcast the difference.
Disney said the timing of the evaluation process is “uncertain” but is expected to be completed sometime next year. It all stems from Disney’s 2019 deal with Comcast to buy its one-third stake in Hulu. The deal was originally scheduled for 2024, but Comcast and Disney agreed to move the date up to Sept. 30.
Taking over in less-than-bullish conditions
Hulu’s subscriber count barely budged last quarter. Around the same time, Disney announced price hikes for all of its streaming services and hinted at a crackdown on password sharing. In October, the price of Hulu’s ad-free service increased from $14.99 to $17.99 per month, while the price of Hulu with live TV increased from $68.99 to $75.99 per month.
Under the deal, Comcast has the option of selling its stake in Hulu at a valuation of $27.5 billion or at the same valuation Hulu will be valued at five years from now. And Comcast’s stake in Hulu will be guaranteed for at least $5.8 billion.
As part of the deal, Disney has agreed to pay Comcast for its Hulu content over the next five years. NBC channels will be available on Hulu Live at a higher rate than previously agreed upon, and NBC will also be able to show the same content on its own streaming service, which is expected to officially launch next spring.
