Disney to buy remaining stake and take over Hulu in $8.6 billion deal

Walt Disney Company, on Wednesday (Nov 1) has agreed to buy 33 per cent of Comcast’s stake in Hulu which will give Disney full ownership of the streaming service and freedom to incorporate it into Disney+ streaming service. 

What did Disney say about the deal?

NBCUniversal, which controls the service, had first agreed in 2019 to sell its stake to Disney. “The acquisition of Comcast’s stake in Hulu at fair market value will further Disney’s streaming objectives,” said the company in a short statement. 

Disney said it is expected to pay Comcast’s NBCU about $8.61 billion by December 1 as a part of the deal, which represents NBCU’s percentage of the $27.5 billion guaranteed floor value for Hulu set in 2019 minus the anticipated outstanding capital call contributions payable by NBCU to Disney. 

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As a part of the deal struck around four years ago, either NBCU or Disney could initiate the transaction as soon as November 1. 

Disney said that Hulu’s equity value will be assessed as of September 30. If the value is determined to be greater than the guaranteed floor value, Disney will pay NBCU the difference.

The entertainment giant also said that while the timing of the appraisal process is uncertain, it believes that it should be completed by next year. 

Disney's plan 

In August, Disney Chief Executive Bob Iger told investors the company was making extensive Hulu content available to bundle subscribers, with the company moving closer to having one app in the United States which would combine Hulu’s general entertainment content with content from Disney’s other brands and franchises. 

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In the same month, Disney reported that its streaming platform lost more than 10 million subscribers in the recently ended quarter, mostly in India after the entertainment giant lost rights to stream popular Premier League cricket matches.

Disney had first gained a controlling interest in Hulu as part of its $71 billion acquisition of 21st Century Fox’s film and television assets, which helped the studio gain a competitive leg up in the streaming wars. 

Hulu was founded in 2007 as a joint venture between News Corporation and NBC Universal.

(With inputs from agencies)