Disney could own as much as $5B more for rest of Hulu

Disney could have to pay as much as $5 billion more to buy Comcast’s remaining 33% stake in Hulu, according to a financial report filed Aug. 7, 2024.

The $5 billion figure comes after Morgan Stanley, which is Comcast’s adviser in the matter, valued Hulu at more than $40 billion. 

Disney already paid Comcast $8.6 billion in November 2023, a figure that represented 33% of the $27.5 billion guaranteed floor value of Hulu, but the companies agreed that Disney might need to pay more if it was determined the streamer was worth more than that.

Disney’s appraiser, J.P. Morgan, meanwhile, arrived at a figure below the $27.5 billion figure.

Earlier in 2024, the two sides agreed to hire RBC Capital as an independent appraiser as part of an arbitration process to settle the issue of value.

The issue isn’t expected to be resolved until sometime in 2025 when a final arbitration decision is issued.

Disney has held a majority stake in Hulu since 2019 when it acquired 21st Century Fox’s minority share in the venture as part of a broader deal. Comcast and Disney then signed an agreement that ceded operational control of Hulu to Disney and laid out a possible path for it take full ownership of the streamer in the future.

Comcast opted to keep its stake in Hulu largely because it hoped the streamer would increase in value.

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Since then, Hulu has shown positive growth, but also stumbled in other ways as the streaming market has become increasingly crowded.

Investors, who had been largely content for streamers to focus on subscriber growth over profits, have also shifted gears and many streaming ventures have had to cut back on content spending.

In 2022, Disney pulled over 100 titles from Disney+ and Hulu in order to remove the licensing costs for these shows and films as liabilities from its books.

Disney also went forward with merging the two streaming platforms’ backends and user interfaces. The company also began heavily marketing a bundle that includes both streamers for a discounted rate (with a separate option to include ESPN+).

Comcast owns the streaming service Peacock through its NBCUniversal division.