Comcast’s CEO Says A Sale of the Company’s Hulu Stake To Disney is Likely
The biggest news to come out of Disney’s Q2 earnings call was that the company would be combining their Disney+ and Hulu libraries for a “one app experience.”
While combining the company’s treasure trove of content into one library makes sense, the change will have larger implications for both Disney and the entertainment industry as a whole.
One of the largest questions looming over Bob Iger and the Walt Disney Company has been what to do with Hulu. Under the current agreement, Disney owns two-thirds of the streaming service, while Comcast owns the other 33%.
In 2024 however, Disney has the option of buying Comcast’s share of Hulu. Conversely, Comcast has the option of forcing Disney to purchase its share.
Disney’s Options
With profitability in streaming elusive, many insiders have wondered whether or not Disney would instead opt to sell their stake in the streaming service.
Bob Iger has already undertaken massive measures to help combat Disney’s mounting debt, and some wondered whether the company would even be in a position to buy Hulu out from Comcast.
Instead, Disney could have chosen to sell their share to Comcast or another media entity altogether.
Disney’s Plans Crystalize
With the announcement that Disney will be combining Hulu and Disney+, however, those arguments seem largely moot.
All signs now point towards Disney purchasing Comcast’s stake in Hulu and jumping into the streaming sphere with both feet.
In a recent interview at MoffettNthanson’s Technology, Media and Telecom Conference in New York, Comcast CEO Brian Roberts seemed to confirm that Disney will become the sole owner of Hulu.
“I think it’s more likely than not,” Roberts said.
What’s The Price?
While it appears as if Disney would be a willing buyer for Hulu, negotiations with Comcast will ultimately come down to the price.
“I think we have a very valuable position”. Roberts said. He also noted that the company will consider what a buyer for Hulu would be willing to pay on the open market when arriving at a valuation of their stake.
“You get all the content from Disney and Fox forever, so in theory what’s that worth?”
For his part, Iger’s announcement of Disney’s one-app experience seemed to tip the company’s hand. With that being said, the Disney CEO insists that nothing is set in stone.
“How that ultimately unfolds is, to some extent, in the hands of Comcast and in the hands of… a conversation or a negotiation that we have with them,” he told analysts.
In the end, it looks like Disney will become the sole owner of Hulu, and the combination of the streaming service with Disney+ will make Disney the largest player in streaming. That is a bold strategy for a company entering uncharted waters.
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