Disney Crushes Comcast – Here’s How…

For the body of five years, I’ve heard the same thing from a vocal minority.

Everyone with a vested interest in Disney doing poorly pointed to the summer of 2025 as an inflection point.

That’s when the tide would turn once and for all. As soon as Universal Epic Universe opened, the fallout would be immediate.

Disney would lose its crown and fade from glory. So, why then did Comcast, the corporate owner of Universal Studios just bend the knee?

Disney crushed Comcast this week…and not for the first time.

Let’s discuss the latest example of why you should never pick a fight with Bob Iger.

Hatfields and McCoys

Do you watch AEW wrestling? If not, you really should. There’s a feud between two guys named Hangman and Swerve.

I cannot explain the entirety of it as it would be a lot even for a soap opera or an HBO series. There was a home invasion to start and then this:

I warmly encourage you to watch the whole segment, but I skipped straight to the arson. Yes, one burned down the other’s home.

Folks, Hangman and Swerve are BFFs compared to The Walt Disney Company and Comcast. Not even joking.

Arson and home invasion have nothing on the shenanigans that have occurred between these two companies over the past 20 years.

In 2002, Brian Roberts succeeded his father, Ralph Roberts, the founder of Comcast, as the company’s CEO.

Three years later, Iger succeeded Michael Eisner as CEO of Disney, and the two have been feuding ever since then.

This isn’t your typical Wall Street quest for dominion, either. The people in the C-suites of Disney and Comcast genuinely dislike one another.

That’s because their core businesses placed them in an adversarial position. At its core, Comcast excelled first as a cable company.

When Iger joined Disney, he was part of the Capital Cities leadership responsible for ABC, ESPN, et al.

Every cable carriage negotiation involving ESPN has pitted Iger against Comcast in a battle for dollars.

NOTHING matters as much to Ralph and Brian Roberts as dollars. They’re real-life C. Montgomery Burns types.

If you don’t believe me, consider that the now-defunct site Consumerist selected Comcast as the Worst Company in America in 2010 and again in 2014.

As with Swerve and Hangman, this story involves a hero in Disney and a Villain in Comcast.

The Recent Battles

You may believe that the two parties came into conflict over theme parks. I can assure you that this is not the case.

While Disney is unquestionably the top theme park operator in the industry, Universal knows it can’t really compete.

Disney remains the dominant force in the theme park oligopoly, claiming market share of roughly 28 percent.

The companies in second and third place combine for 28 percent market share, while Universal currently holds 12 percent.

So, even if Universal improves to 14 percent thanks to Epic Universe, it’s still only at half of Disney’s customer base.

Importantly, that would be a huge gain for Universal. Like, that would be a massive win for them, yet it still wouldn’t impact Disney much at all.

No, these companies are at war over all things media. They obviously aren’t the only players, as Netflix currently has a higher market cap than both combined.

Other companies like Apple and Amazon could buy either one if so inclined, as they’re the biggest fish.

Those businesses aren’t currently interested in doing so, though. Comcast and Disney have been fighting for supremacy for ages.

Their feud escalated in 2017 when Disney announced the intent to purchase Fox’s media assets for a staggering sum, $52.4 billion.

Comcast wanted Fox as well, partially because the Roberts family didn’t want Disney having it. Yes, I’m serious.

Comcast published a press release about its superior bid of $65 billion. That happened seven years ago almost to the day.

That’s a big part of the story here as history just repeated itself. In 2018, Comcast grudgingly dropped out when Disney bid $71.3 billion.

An Escalation Akin to Hangman’s Arson

Disney won Fox, but Iger wasn’t happy. Comcast had bid up the price of Fox’s assets so much that Disney had to pay nearly $19 billion more.

At the time of publication, Disney lists total debt of $42.88 billion. If not for Comcast, that total would be closer to $20 billion.

Remember that Disney had to acquire new loans at the start of the pandemic.

Since the rates were higher, Disney spent extra money from that $19 billion plus the interest on more than $50 billion.

Basically, Comcast wrecked Disney’s liquidity, and Iger nurtured a grudge.

Soon afterward, Comcast bid on the most appealing media asset that remained on the market at the time. It was Sky.

Iger wasn’t about to let Comcast buy Sky at a discount. So, Disney and Fox worked together to force Comcast to bid more.

Comcast paid $39 billion for an asset that was NOT worth $39 billion, and the outcome has been predictable.

Comcast owning Sky is terrible for Comcast, for Sky, and for Sky viewers. Who does Comcast blame? Disney.

Disney Crushes Comcast (Again)

That brings us to Hulu, which had become the latest battleground between the two companies until this week.

Disney originally owned one-third of Hulu, while Fox owned another one-third, and Comcast gained the other one-third when it bought NBCUniversal.

So, Disney’s acquisition of Fox was doubly bad for Comcast. First, the Roberts family didn’t get Fox for themselves.

Also, Disney gained two-thirds control of Hulu, meaning it could outvote Comcast on anything involving the streaming service.

To its credit, Comcast simply ceded the point and gave Disney full operational control over Hulu.

The agreement came at a cost, though. Comcast expected Disney to pay one-third of the valuation of Hulu.

Since the Roberts family viewed Hulu as a growth product, Comcast established the payment timeline for five years later.

When Disney was ready to pay, the two parties predictably couldn’t agree on terms.

Disney claimed it was worth less than the $27 billion they’d both listed as a baseline. Comcast swore Hulu had increased to $40+ billion.

The two parties couldn’t come to terms. So, the matter went to an arbitrator…and then another arbitrator.

None of these arbitrators really wanted to pick between two incredibly powerful media corporations, hoping the two parties would work things out.

For its part, Comcast really didn’t want to lose this one, as it’d be another black eye after the Fox and Sky deals.

Meanwhile, Disney has probably run Hulu even better than its own existing service, Disney+.

Hulu has unequivocally increased in value, something I discuss each week in the Nielsen Streaming Ratings articles.

Why then did Comcast just bend the knee and meekly bow out?

Never Pick a Fight with Bob Iger

I wish you could have seen the look on my face when I saw this report.

After YEARS and YEARS of bluster, Comcast accepted a whopping total of $438.7 million for the remaining cost of Hulu.

Including Disney’s prior payment, Comcast received almost exactly $9 billion for an asset it had claimed was worth $40+ billion.

You don’t need to be an MIT grad to know that $9 billion is NOT one-third of $40 billion. Where’s the other $4 billion, Comcast?

This must have been the worst negotiation since Homer Simpson bid on a doorstop.

Like, I feel bad for Comcast. Over the past several years, I’ve watched Comcast officials posture that Disney would pay for Epic Universe.

The thought process centered on Comcast bullying Disney into a huge settlement far above the $27.5 billion valuation. That…didn’t happen.

I guess you could argue that the Epic Universe thing is still technically true, given that Disney paid Comcast a total of about $9 billion.

However, I’ve done the calculations here, and it’s still slightly less than the expected amount for something with a $27.5 billion valuation.

Comcast just folded here. It’s a bad look. And I’m faaaaaaaar from the only business analyst saying this. Investors are mystified.

At this point, the Disney/Comcast feud is incredibly one-sided. Every time Comcast picks a fight, Disney whips them.

If I were the Roberts family, I’d stay away from Bob Iger.

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Feature Photo: Disney