Disney Completes Acquisition of Hulu Stake
In a significant move within the streaming industry, Disney has agreed to pay Comcast $438.7 million for its share in the streaming service Hulu. This payment finalizes a prolonged appraisal process that has spanned several years. Originally, in 2023, Disney had indicated its intent to fully acquire Comcast’s 33% stake in Hulu, paying an initial sum of $8.6 billion, which reflected Hulu’s minimum guaranteed valuation of $27.5 billion as established between the two companies in 2019.
Disney’s desire to take complete control of Hulu followed its earlier acquisition of a two-thirds stake when it purchased Fox Corp.’s entertainment assets. The acquisition solidifies Disney’s foothold in the competitive realm of streaming content, a market that has grown increasingly vital for major entertainment firms.
The appraisal process that followed the initial stock adjustment was initially expected to conclude in 2024; however, the engagement of a third appraiser saw it reach a resolution more swiftly. Disney’s appraiser determined a valuation that fell below the guaranteed floor, while Comcast’s NBCUniversal appraiser presented a notably higher valuation exceeding the agreed-upon floor. Ultimately, the dispute was resolved with a third-party assessment, leading to an amicable conclusion.
The impending transaction is set to finalize on or before July 24. Disney has stated it will categorize this payment within its "net income attributable to noncontrolling interests," which will in turn decrease the net income attributable to Disney reported in its fiscal third-quarter financial statements. Importantly, this transaction is not anticipated to alter Disney’s previously provided guidance for fiscal 2025 adjusted earnings.
Disney CEO Bob Iger expressed his satisfaction with the resolution of this long-standing matter, highlighting the productive partnership Disney has fostered with NBCUniversal. He remarked that the completed acquisition will facilitate a deeper and more cohesive integration of Hulu’s rich content into Disney+, as well as the forthcoming ESPN direct-to-consumer streaming platform.
In preparation for this integration, Disney has already begun unifying Hulu and Disney+ services, which are now available in bundled packages that also include ESPN+. This strategic bundling caters to the increasing demand for diversified streaming services in an evolving digital marketplace.
From Comcast’s perspective, its NBCUniversal division has been diligently enhancing its own streaming service, Peacock, during the last few years since its launch in 2020. A spokesperson from Comcast noted that Hulu has been instrumental for the company, generating nearly $10 billion in revenue and cultivating a significant audience for NBCUniversal’s premium content.
As of Disney’s last earnings report, Hulu boasted over 50 million subscribers, contributing to Disney's total of 180.7 million streaming subscribers, primarily from Disney+. Conversely, Comcast’s Peacock channel reported approximately 41 million subscribers recently. This development underscores the dynamic and highly competitive nature of the streaming industry as Disney and Comcast continue to navigate their respective paths in it.
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