Comcast-Disney Talks Regarding Hulu Sale Moved Up to This Month; What Will Disney Have to Pay?
The average streaming subscriber can be forgiven for not giving much though to who owns Hulu. As long as the streamer continues offering next-day streams of ABC, Fox and FX titles, as well as originals like “Only Murders in the Building,” who cares who owns which parts of the company?
For Comcast and Disney, however, the question of who owns Hulu is a multi-billion dollar one. Disney is contractually obligated to buy the 33% of Hulu that Comcast currently owns by 2024, and the two sides are due to sit down to discuss the price soon. Variety reports that Comcast and Disney have modified their agreement to start the talks early, and will meet on Sept. 30 to engage in sale talks.
The two sides agreed to a minimum valuation of $27.5 billion for Hulu in 2019, meaning Disney will have to pay at least one-third of that to get the remaining one-third of the streamer that it doesn’t currently own. Comcast CEO Brian Roberts has been insistent for months that if his company’s portion of Hulu were put up for auction, it would garner a much higher price than the ~$9 billion Disney wants to pay based on the minimum valuation.
There are plenty of Wall Street analysts who agree with Roberts on the valuation of 33% of Hulu. According to Business Insider, Macquarie analyst Tim Nollen estimates the current value of Hulu at between $35 and $37 billion, meaning Disney would have to pony up around $12 billion to bring the entire company under its roof.
Other analysts believe the valuation is still closer to the $27.5 billion mark. “On the open market, I think they’d get something close to the floor,” Barton Crockett of Rosenblatt Securities told Insider.
Most analysts agree that buying Hulu would be good for Disney overall. The disagreement over its valuation has been both public and abrasive at times, but Roberts still thinks Disney is going to make the commitment necessary to acquire the streamer. If the two don’t agree on a valuation together, an independent arbitrator will be granted access to Hulu’s books to come up with a fair price.
Disney may not own 100% of Hulu yet, but that hasn’t stopped it from announcing a price increase to the ad-free tier of Hulu on-demand, as well as on its live TV streaming service. Those increases take effect Oct. 12. The move is part of Disney’s overall strategy to make its streaming segment profitable, and make streaming the centerpiece of its media offerings as it prepares to move away from linear TV.
Despite the move-up of sale talks to Sept. 30, there is no timetable yet on when the acquisition of Hulu by Disney might be complete. The contract stipulates the sale must be finished by 2024, and considering the pace at which the process has moved so far, it may indeed take that long to close.
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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.”