Comcast Is Open to Alternatives Other Than Selling Hulu to Disney

The future of Hulu continues to be unclear. In recent months, both Disney and Comcast have indicated their respective companies would be open to selling their shares in the streamer, but also that they would be open to owning it outright. Now, Comcast President Mike Cavanagh has weighed in, indicating that the company is willing to entertain offers to sell its 33% stake in Hulu to companies other Disney, which owns the remaining 2/3.

Hulu began as an equal partnership between Disney, Comcast, and FOX with each owning 1/3 of the streaming platform. However, Disney acquired majority control of the service when it purchased the bulk of 20th Century Fox’s assets in 2019. According to an agreement reached at the time of the sale, both sides have the ability to force a sale of Comcast’s shares in early 2024 at an independent valuation of the service, but guarantees that Hulu will not be valued below $27.5 billion. That means that Disney would have to spend at least $9 billion to acquire Comcast’s stake to gain full ownership.

“[Disney and Comcast], back in 2019, put together a very clear and good agreement for a put call that does happen in early 2024,” Cavanagh said at the Morgan Stanley media conference this week. “So we know what that looks like. We’re very happy and if that’s the way it plays out, that would be great. But if there’s something different that comes along, we have to consider things, but we won’t do something unless it’s better in our minds than that.”

Comcast and NBCUniversal higher-ups have indicated that if Comcast’s stake in Hulu was placed up for auction, they believe that it would command a high price. The question then becomes what other options could be out there besides Disney. FOX Corp. CEO Lachlan Murdoch has indicated thatthe company is open to major acquisitions, and given the history that the company has with the service, that seems possible.

But beyond that, in the age of cost-cutting and consolidation, it would seem unlikely that any of the other major media companies would be willing to take on such a major financial addition. There could be private equity companies interested in purchasing Hulu, but it still feels like either Disney or Comcast owning the platform entirely are the most likely options.

However, Comcast chairman and CEO Brian Roberts and NBCUniversal CEO Jeff Shell had slightly different takes on what the future would hold for the streamer. Roberts said that Comcast would be interested in buying the entirety of Hulu if it became available, probably to integrate it into the company’s current streaming service Peacock. However, Shell said that NBCUniversal, like many others, would want to own Hulu, but he didn’t see that happening despite it being a valuable asset.

For Disney’s part, the company is open to selling Hulu instead of shelling out billions to buy it from Comcast. This could be because Disney might be able to organize its streaming business to concentrate on Disney+ by selling Hulu in order to deal with its debt problem that has arisen as a result of the acquisition of 20th Century Fox. Disney+ already features material from studios like 20th Century Studios, FX, and ABC internationally as part of its Star brand, so it wouldn’t be unimaginable to do so domestically as well.

“I am not going to speculate whether we are a buyer or a seller of it,” Disney CEO Bob Iger said in a CNBC interview in February. “But I obviously have suggested that I’m concerned about undifferentiated general entertainment, particularly in the competitive landscape that we are operating in, and we are going to look at it very objectively and expansively.”

As part of a potential sale to Comcast, Disney could ask for more than just money. One analyst believes that in addition to cash, Disney should ask to secure the distribution rights to two Marvel Comics characters that Comcast now holds, the Incredible Hulk and the Sub-Mariner Namor. If Disney did sell its share of Hulu to Comcast, the latter media conglomerate would then own 100% of the platform. Additionally, it would allow Disney to create standalone films around the popular characters.

In the end, Comcast will want to pay as little as possible to acquire Disney’s share in Hulu. However, if it simply wants to profit from its investment, it makes sense for Comcast to be open to selling to anyone willing to pay more.