Comcast and Disney Agree to Speed Up Hulu Deal
The tug of war over Hulu, one of the world’s most popular streaming services, might be over sooner than expected.
Brian Roberts, the chief executive of Comcast, said on Wednesday at an investor conference that his company had agreed to move up negotiations to sell its stake in Hulu to the Walt Disney Company, which owns the majority of the streaming service.
Mr. Roberts said Comcast and Disney had agreed to conclude their negotiations over how much Hulu was worth at some point after Sept. 30, when a formal appraisal process for Hulu’s valuation would begin. That process had been expected to conclude at some point after January.
“It will take a little time for this to play out, but both companies wanted to get it behind us,” Mr. Roberts said. “So we pulled the date forward.”
Mr. Roberts’s remarks were an unusual glimpse at the behind-the-scenes deal making between Comcast and Disney, which have been engaged in high-stakes negotiations over the future of the streaming service. Hulu has more than 48 million subscribers, making it a valuable weapon in the war for streaming supremacy.
The question now is how much the company is worth. Previously, the two sides had agreed that Disney could require Comcast to sell its 33 percent stake in Hulu at a price that values the entire company at no lower than $27.5 billion. Comcast could also force Disney to buy its stake at that price.
In his remarks on Wednesday, Mr. Roberts said Comcast believed Hulu was worth much more than $27.5 billion. Calling Hulu a “kingmaker asset,” Mr. Roberts said the streaming service would most likely draw suitors that included deep-pocketed technology companies if it went up for sale in an open auction.
Mr. Roberts said Comcast intended to return some of the proceeds from the deal to its shareholders, investing the cash into the company’s share buyback program.
Founded in 2007, Hulu was for many years the streaming equivalent of Frankenstein’s monster, an emerging start-up backed by competing heavyweights of the media world: 21st Century Fox, Comcast’s NBCUniversal, Disney and Time Warner.
Hulu’s owners had hoped that the shared ownership would make Hulu the streaming equivalent of Switzerland, a communal hedge against the rising power of the internet.
But as Hulu’s business matured, its owners dwindled. Disney gained control over Hulu after it purchased 21st Century Fox’s entertainment assets, and AT&T — which had acquired Time Warner — sold its 10 percent stake back to Hulu in 2019. That left Disney in pole position to buy out Comcast’s interest.
After its deal with 21st Century Fox, Disney signaled that it intended to buy out Comcast’s interest in Hulu, the last piece of a streaming bundle that included ESPN+, a sports-focused streaming service, and Disney+. This year, Disney’s chief executive, Bob Iger, told CNBC in an interview that “everything was on the table” with Hulu, implying that an eventual sale of its controlling stake was also a possibility.
