Disney Begins Process To Buy Out Comcast’s Share Of Hulu
They’re going all in
Disney announced Wednesday that it plans to acquire Comcast’s remaining 33% stake in Hulu. The price is expected to be $8.61 billion but truly this is actually the start of the appraisal and negotiation phase.
That $8.61 billion is NBCUniversal’s percentage of the $27.5 billion “guaranteed floor value” for Hulu that was established when Disney and Comcast entered in to their 2019 put/call agreement, where Disney took over operational controls and Comcast could force Disney to buy NBCUniversal’s interest in Hulu, or Disney could do the requiring NBCUniversal to sell that interest to them for its fair market value “minus the anticipated outstanding capital call contributions payable by NBCU to Disney.” Hulu’s equity fair value will be assessed as of this past September 30, Disney said, and “if the value is ultimately determined to be greater than the guaranteed floor value, Disney will pay NBCU its percentage of the difference between the equity fair value and the guaranteed floor value.” The final price tag could be much higher than the $27.5 billion, at least as Comcast seeks, citing Nielsen data that said Hulu’s engagement is “two to three times” that of rival streamers that aren’t Netflix. The multi-appraiser process will see Disney pay the $8.61 billion to Comcast by December 1 as the fair market value analysis happens from independent experts, likely raising the final price anyway.
They don’t know how long the appraisal process will take, but both sides are expecting for it to be taken into the new year. In early September, the sides modified their Hulu agreement to allow the buyout process to begin on September 30 instead of January 2024. Hulu began in 2008, with a partnership that not only had Disney and NBC Universal and 20th Century Fox. Time Warner also acquired a 10% stake in 2016 but eventually sold it back in 2019, by which point it was already WarnerMedia. It was Disney buying 20th Century Fox and the piece they had that gave such a majority that it’s what triggered the moves that led us here.
Source: Deadline