Disney strikes $8.6bn deal with Comcast to take full Hulu ownership

Only Murders in the Building

The future of Hulu has finally been settled, with Disney set to take full ownership of the US streamer by acquiring Comcast-owned NBCUniversal (NBCU)’s 33% stake in the business for an initial price tag of $8.6bn.

Disney said that that figure, which it expects to have paid by 1 December, represents NBCU’s percentage of the $27.5bn “guaranteed floor value” of Hulu that was set when the companies entered into their agreement in 2019, minus any related costs owed by NBCU to Disney.

The Handmaid’s Tale

Fluxing valuation

In a widely expected move, the Mouse House said that it was paying “fair market value” for NBCU’s stake in the streamer, which carries shows such as The Handmaid’s Tale and Only Murders In The Building.

The deal comes after Comcast exercised its right under the put/call arrangement between the two companies.

Disney had already taken full operational control of Hulu in May 2019, following its $71bn acquistion of Fox.

Hulu’s final value – and thus the amount Disney has to pay – will be assessed by both companies based on the streamer’s activities on 30 September, 2023.

Comcast chief Brian Roberts has talked up the valuation of Hulu over recent months and put a figure of around $60bn on the company, having initally admitted in May that he would be “more likely than not” to sell his 33% stake to the Mouse House.

He told the Goldman Sachs’ Communacopia and Technology conference last month that the “minimum $27.5bn that people have bandied about… was a hypothetical that we picked five years ago because Disney has control of the company. The company is way more valuable today than it was then.”

If the value is 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.

The Mouse House said that the timing of the appraisal process is uncertain but anticipates it will be completed during 2024.

Brian Roberts

Constructive conversations

The sale of Hulu has been an ongoing topic of discussion over the past year in the US, with Disney having until now owned 66% of the streamer with NBCU parent Comcast holding the other 33%.

The put-call deal struck in 2019 was to come into effect in January 2024, through which Disney could force Comcast to sell its 33% of Hulu – or Comcast could force Disney to buy its stake.

However, formal talks began well ahead of that date, kicking off in September, with Comcast CEO Brian Roberts revealing that he was “excited to get this resolved” following “cordial” and “constructive” discussions held over its future earlier this year.

Disney CEO Bob Iger had earlier in the year muddied the waters around the future of the US streamer, telling investors that before it made “any big decisions about our level of investment and our commitment to that business, we want to understand where it could go.”

With confirmation of the acquisition – although not the final price – now agreed, it seems the Mouse House has sufficient clarity on its next moves for the streamer.