The future ownership of Hulu remains uncertain as Disney CEO Bob Iger remained non-committal when pushed on the Mouse House’s plans for the US streaming service this week.
Disney owns 66% of The Handmaid’s Tale streamer Hulu, which it picked up following its acquisition of 20th Century Fox, while Comcast holds the remaining 33% stake.
Its future is currently under discussion as a put-call deal struck in 2019 will come into effect early next year, through which Disney can force Comcast to sell its 33% of Hulu – or Comcast can force Disney to buy its stake.
The put-call agreement will require an independent valuation, but guarantees a minimum of $27.5bn, which means that if Disney were to buy Comcast’s stake to take full ownership, then it would set them back at least $9bn. However, some Wall Street experts have suggested that Comcast may also move to take full ownership of Hulu.
Speaking at the Morgan Stanley Technology, Media and Telecom Conference this week, Iger talked up the strength of Hulu’s original programming, content library and advertising potential, but said that the “environment is very, very tricky right now.”
The Disney chief explained: “Before we make any big decisions about our level of investment and our commitment to that business, we want to understand where it could go.”
Iger, who returned as CEO in November, remained on the fence as to whether Disney, which also has a DTC service in Disney+, would be interested in taking full ownership of Hulu, describing streaming on the whole as a “nascent business” that required further consideration.
“We’re also at an interesting point in the world, from a media perspective, where a lot of people are still getting linear programming and while I have said publicly that I don’t think the future of linear is very bright and eventually everything will migrate toward streaming, we’re not quite there yet.”
Speaking at the same conference earlier in the week, Comcast president Mike Cavanagh indicated the media giant was hoping to sell to Disney – but would be willing to consider alternative deals for its stake in Hulu.
Hulu recorded 48 million subscribers at the end of last year. In an interview with CNBC last month, Iger suggested for the first time that Disney may seek to sell its 66% of Hulu rather than acquire the streamer in full, stating that that “everything is on the table right now” in regards to its future.
Iger also discussed succession plans at the conference, highlighting them as “pretty much at the top of the list” in terms of priorities right now. The Disney CEO revealed that the Mouse House is looking to confirm a new chief before his two-year tenure is up.
His November return came alongside the shock exit of Bob Chapek and plans to “set the strategic direction for renewed growth” and help to “develop” a successor to take on the role after the completion of his term.
“We all know that not only is it an important decision but that we don’t have endless amount of time to make it, and we are mindful of that,” he said at the conference, adding. “Conversations have been great. I am confident that we will identify the right successor at the right time.”
Iger has swiftly put in plans to right the ship after Disney’s Q4 report revealed that DTC losses had risen to $1.47bn. Since his return, Iger has unveiled a new structure at the Mouse House, including cutting 7,000 jobs, slashing $3bn from content spend and overhauling its content operations, with a full-blown return to third-party sales in the works.
“It was clear that the company needed to be stabilized. It was clear that reorganisation was necessary, and it was also clear that we had to come to grips with our cost structure for a variety of reasons – whether they were competitive, disruptive, or global economic.
“And we have done all of that already. We have stabilised, we have reorganised, we have truly aggressive cost-cutting efforts. Now it’s about getting our content pipeline right, making sure that we are making the right decisions, and the right number of decisions in terms of how much we’re making,” said Iger at the conference.