Comcast and Disney Hire Investment Banks To Appraise Hulu
With Bob Iger having come to the conclusion that Disney is best served buying out Comcast’s stock in Hulu, the question facing the two companies is how much is the streamer worth?
For those who don’t know, under a 2019 agreement, Disney currently owns a 66% stake in Hulu, while rival Comcast owns the other third.
Per the agreement, however, Disney has the option to buy out Comcast’s share of the streaming service beginning in 2024.
Disney Has Decided To Buy The Rest of Hulu
While many spectators felt that Disney could be best served to sell their sharing of the streamer, either to Comcast or another company altogether, Bob Iger came to the conclusion that Hulu was an important part of Disney’s future.
Disney will now roll out a “one-app” experience that combines the libraries of Hulu and Disney+. As such, Comcast and Disney have agreed to get a sale done as soon as possible.
Appraising Hulu
In order to come to a fair price for Comcast’s stake in Hulu, both Disney and Comcast have hired banks to appraise the streaming service.
Comcast has hired Morgan Stanley, while Disney has tasked JPMorgan Chase with the job.
Hulu will now be valued from January 2024 to September 30, 2024. At that time, Disney will exercise their option to buy Comcast’s stake. Alternatively, Comcast will exercise its option to sell.
Once the option is triggered, the two banks will begin their assessments of Hulu’s valuations. If the banks come to final evaluations within 10% of each other, the average of the two sums will be the price at which Hulu is valued.
Disney will then pay Comcast 33% percent of the total for their share of Hulu.
If the two banks’ assessments do not fall within a 10% range of each other, Comcast and Disney have agreed to hire a third bank to make the valuation. The third valuation would then be averaged out with the closer of the first two evaluations.
How Will Hulu’s Value Be Determined?
How Hulu is valued will be interesting. Comcast has argued that a fair appraisal of the steaming service would have to include Hulu’s synergistic value to Disney.
As the streamer is often paired with Disney+ and ESPN+ for Disney bundles, the streamer has intrinsic value to the company.
Roberts has also argued that Hulu should be valued at what it would fetch on the open market.
Disney meanwhile, likely has a more traditional valuation of the streaming service.
Good News For Disney Subscribers
While the Hulu sales process will be interesting for Wall Street observers and investors, the end result will be the same. Disney will fully own Hulu and will likely integrate the streamer’s library into Disney+.
As always, check back with MickeyBlog. We will continue to bring you updates on Disney’s acquisition of Hulu.
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