Hulu was originally launched in 2007 as a joint venture between multiple companies. At that time, it was primarily designed to be a streaming home for the TV productions of Fox, NBCUniversal, and more. After various corporate acquisitions and mergers, the owners of Hulu in recent years have been Disney and Comcast — both of whom have their own, separate streaming services. (Disney runs Disney+; Comcast has Peacock.)
Since 2019, Disney has had full control of the operation of Hulu, and has used it as a complimentary service to Disney+, offering more mature fare than generally is available on the family-friendly Disney+. When that deal was put in place, it included a contractual clause that would allow Comcast to sell its one-third stake in Hulu to Disney in 2024. And today, Disney announced it was indeed purchasing the remaining third of the service from Comcast.
“The acquisition of Comcast’s stake in Hulu at fair market value will further Disney’s streaming objectives,” a press release stated.
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The press release also gives more information on the terms of the deal:
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.
What this means for the future of Hulu within the Disney portfolio, and whether they continue to operate it as a distinct entity apart from Disney+ remains to be seen. If I was paying approximately $8.61 billion for something, I probably would continue to operate it as a distinct entity, but what do I know?
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