Disney is on the brim to becoming the 100% owner of Hulu. Disney to acquire remaining stake in Hulu for expected $8.6 billion. Comcast’s one-third stake in Hulu will be acquired by Disney for an expected $8.61 billion, the company said Wednesday. Disney and Hulu deal will put the streaming service entirely inside the Magic Kingdom when the transaction closes later this year.
“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 and Comcast merger
Wednesday’s Disney Comcast merger brings to an end long-running speculation about the fate of Hulu, but still requires an appraisal process. The process is expected to be completed in 2024 to further assess the streaming service’s fair value before a final sale price tag is agreed upon.
Disney’s bid to acquire the remaining shares in the platform began in 2019 under an agreement between the two companies that gave Hulu a value of at least $27.5 billion.
Changes made by Disney
Disney chief executive Bob Iger publicly signaled in recent months his intention to acquire the remaining shares of the streaming service Hulu, saying in March that Disney “was studying the business very, very carefully.”
The decision comes as the entertainment giant Disney makes dramatic shifts in its media business, with Iger openly floating the possibility it could sell off its ABC division. Also is on the hunt for a “strategic partner” for ESPN as it aims to quickly transition from the linear television business to streaming.
All about Hulu
Hulu, the subscription-based streaming platform, was founded in 2007 with joint ownership by a group of media companies including 21st Century Fox, Comcast, and CNN’s former parent company Time Warner. In recent years, those companies have begun to focus on their respective streaming platforms.
In 2020, NBCU launched its own subscription-based streaming platform, Peacock, and Comcast began shifting programming from Hulu onto the new platform, including Bravo and NBC shows.
But Hulu has continued to show growth with hit original movies and shows including “The Handmaid’s Tale,” “The Bear,” and “Reservation Dogs,” amassing more than 48 million subscribers even as the price of the service has continued to rise.
Disney’s plan for Hulu
Disney has also bundled the Hulu service as part of its larger portfolio of streaming services, including Disney+ and ESPN+, offering it at a discounted rate as part of the larger package. But Hulu has been a bright spot in Disney’s media empire as it works to quickly make streaming profitable and capture a large subscriber base lured by its vast entertainment library.
“I’ve now had another three months to really study this carefully and figure out what is the best path for us to grow this business,” Iger said on a May earnings call. “It’s clear that a combination of the content that is on Disney+ with general entertainment is a very positive, is a very strong combination from a subscriber perspective.”
Disney’s Hulu expansion plan
The long-held theory on Wall Street is that Disney has not expanded Hulu outside the U.S. so as not to increase its value and thus keep a lid on what it would have to shell out to Comcast. Once it owns Hulu outright, Disney will be poised to launch it as a general entertainment service worldwide.
Many Wall Street analysts are skeptical that Hulu is worth dramatically more than $27.5 billion minimum value the companies set in 2019, especially now that the gold-rush, grow-at-any-cost streaming era is over and replaced by a focus on profitability.
Disney quarterly earnings
Disney quarterly earnings results are going to be reported on Nov 8.
