By Gary Symons
TLL Editor in Chief
The Walt Disney Company says it will acquire the remaining 33% of shares in Hulu from NBC Universal to increase its streaming content.
Disney and NBCU have co-owned the company for some years now, but the House of Mouse now says NBCU parent company Comcast exercised its right under an agreed-upon ‘put-call’ arrangement to sell its remaining shares, comprising one-third of the total equity.
The purchase price of $8.6 billion is considered to be fair market value, representing the one-third share 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.
There will be a final appraisal prior to the sale closing, so Disney expects to seal the deal in 2024. “We look forward to the appraisal process and the determination of Hulu’s fair market value which we expect will reflect the extraordinary value of the business,” Comcast said in a statement.
The news ends long-running speculation about the future of Hulu, as it was long expected Disney would acquire the remaining shares in a drive to bolster its streaming services. “The acquisition of Comcast’s stake in Hulu at fair market value will further Disney’s streaming objectives,” the company said in a short statement.
Disney CEO Bob Iger has said in recent months that the company wanted shake up its assets, dropping some divisions in the linear TV business, while buying out Hulu to better compete with major streaming giants like Amazon Prime Video and Netflix. The acquisition announcement also follows news that Disney is in talks to sell its assets in India, including the Disney+ Hotstar streaming service to its main competitor in that country, Reliance Industries.
As well, while looking at selling off the linear TV ABC network, Iger has said he would likely keep ESPN, but is looking for a strategic partner to improve its operation.
Hulu, however, is considered the most important factor in Disney’s growth, as it greatly broadens the company’s streaming content offerings. Hulu was founded in 2007 as a jointly-owned streaming service, shared by 21st Century Fox, Comcast, and CNN’s former parent company Time Warner, in an early attempt to compete with Netflix. However, more recently, those companies have begun operating their own streaming services, creating a situation in which the public can choose between several streaming options.
Under the co-ownership of Disney and NBCU, however, Hulu has continued to be a strong performer with a wide selection of critically acclaimed series and films like The Bear, Reservation Dogs, and The Handmaid’s Tale, that has helped it attract more than 48 million subscribers. It has also distinguished itself by showing a profit, while Disney+ has struggled to reach profitability despite rapid subscriber growth.