“Only Murders in the Building” on Hulu
Courtesy of Hulu
Disney has agreed to take full control of Hulu in a deal with Comcast, which has owned a third of the streamer since Disney acquired 21st Century Fox’s entertainment assets.
“Acquiring Comcast’s stake in Hulu at fair market value will advance Disney’s streaming goals,” the Bob Iger-led company said in a statement Wednesday.
A securities filing confirmed that NBCUniversal triggered the purchase earlier in the day.
Wall Street has repeatedly debated Hulu’s future over the past year due to its common ownership and put and call options. Since November, Comcast has had a put option to force Disney to buy its stake, while Disney had the right to ask Comcast to sell its stake. Under an agreement between the two companies, Hulu was supposed to receive a fair market value valuation from independent experts, but Hulu’s guaranteed minimum value of $27.5 billion meant Disney knew it had to raise at least $9 billion.
In Wednesday’s filing, Disney said it expects to pay $8.61 billion (which is the minimum valuation) by Dec. 1, although it will go through the valuation process to arrive at the final estimate of Hulu’s value and to determine the amount (if any) The company must pay more than $8.61 billion.
“Although the timing of the evaluation process is uncertain, we expect it to be completed in calendar year 2024,” Disney said.
Disney CEO Bob Iger has signaled he wants to refocus the company on its popular content brands from Pixar and Marvel to Lucasfilm, including family and children’s fare. When asked on CNBC in February 2023 what this means for Hulu, he said: “Everything is on the table right now, so I’m not going to speculate on whether we’re buyers or sellers of it.” But I’ve obviously hinted that I’m worried about the undifferentiated general conversation [content]particularly in the competitive landscape in which we operate.”
Trying to read between the lines, MoffettNathanson analysts Craig Moffett and Michael Nathanson wrote in a report at the time: “Disney CEO Bob Iger has been remarkably noncommittal about Disney purchases. And he was particularly cautious about Disney sales. Comcast was typically quiet. Let the speculation begin.” But he and most other analysts have since viewed Comcast as the natural seller of his Hulu shares.
Roberts then said at an annual Goldman Sachs event earlier this fall that the option’s triggering was highly likely.
In July, Moffett and Nathanson predicted Hulu would add about 2.0 million subscribers annually “to reach 55.2 million subscribers by 2026,” including 49.7 million SVOD users, with the remainder live TV+SVOD customers . “We expect Hulu to generate revenue of $14.1 billion in fiscal 2026.”