Is Hulu Worth $45 Billion? One Analyst Thinks So, Which Would Mean Disney Will Owe Comcast Big Bucks
Is Hulu Worth $45 Billion? One Analyst Thinks So, Which Would Mean Disney Will Owe Comcast Big Bucks
The question of Hulu’s true valuation has been so hard to agree on for Disney and Comcast, they’ve brought in a mediator to help them determine a price.
Disney executives are likely eyeing their piggy banks nervously these days, knowing they could be called upon at any moment to break them open and throw their contents onto the company’s pile. The company started negotiations with Comcast over the purchase of that company’s 33% stake in Hulu in September, moving them up from their originally-scheduled date of January 2024.
- The move-up in sale talks suggests Disney is anxious to have all of Hulu under its control.
- One analyst believes the streamer could be worth as much as $45 billion, meaning Disney would have to pay $15 billion for Comcast’s stake.
- Purchasing the rest of Hulu quickly will allow Disney to focus on launching its streaming version of ESPN.
Bring Your Credit Card, Disney
The shift in negotiation schedules led observers to believe that Disney was eager to get going on the purchase of Comcast’s share of Hulu. That opinion was further reinforced by reports that Disney wanted to launch its “one-app experience” that combines Hulu with Disney+ by the end of this year, a process that will certainly be made easier if Disney is the outright owner of Hulu.
However, neither side can agree on a cost for Comcast’s portion of Hulu and an independent mediator has been brought in to aid in that process. According to Seeking Alpha analyst and blogger Juxtaposed Ideas, that price tag may come in much higher than Disney anticipated going into this process.
That analysis pegs Hulu’s total valuation at $45 billion, which would mean that Disney would have to pay $15 billion for Comcast’s 33% share. That’s much higher than the $27.5 billion minimum valuation agreed to in 2019 when Disney and Comcast signed a contract that stated that both companies could force a sale of Comcast’s portion of Hulu to Disney by 2024.
But just like the companies themselves, different market analysts have different opinions regarding Hulu’s worth. Some think the streamer is worth closer to $35-37 billion, while others believe on the open market it would fetch closer to the $27.5 billion floor that was agreed to in 2019.
Clarifying Priorities
The news that Hulu might be worth as much as $45 billion is music to the ears of Comcast CEO Brian Roberts, who has long maintained that if his company’s portion of the streamer were put up for public auction, it would fetch much more than $9 billion. But for Disney, keeping the price as low as possible is absolutely crucial.
Buying the rest of Hulu is very high on Disney’s priorities list, and one of the reasons the company wants to move on it so quickly is because it has other expensive items coming up fast. The company wants to roll out a streaming version of the ESPN group of channels that won’t require a cable subscription by 2025, and the expense of that proposition has already led it to seek multiple partners for the venture.
ESPN brings in more profit for Disney than its entire Entertainment division at present, but the company knows you have to spend money to make money. Having full control of Hulu will allow Disney to focus more on the new ESPN streaming platform, so wrapping up the Hulu purchase quickly makes plenty of sense if it can be accomplished.
For now, observers must await the decision of the mediator to hear how much Hulu is actually worth before any movement can happen. Some analysts think the price will be far, far greater than Disney was hoping when it began this process four years ago.
Hulu
Hulu is a video streaming service that gives access to thousands of full seasons of exclusive series, hit movies, kids shows, and Hulu Originals like “Only Murders in the Building,” and “The Handmaid’s Tale.”