Disney has officially secured control of Hulu, with CEO Bob Iger offering $8.6 billion to Comcast for full ownership. This strategic move is part of Disney’s larger push towards a streaming-centric future. The transaction involves determining the value of Comcast’s one-third share in Hulu.
Disney is in the process of launching a unified app that will integrate Hulu’s general entertainment content into Disney+, streamlining their offerings. The evolution of Hulu, initially formed by News Corp’s 21st Century Fox, Comcast’s NBCUniversal, and Disney in 2007 to compete with YouTube, has seen various phases.
After Disney’s majority ownership in 2019, there were speculations about potentially offloading Hulu. However, Iger has shifted his stance, recognizing the “real value” in combining general entertainment with Disney+. Analysts view this as a strategic move to compete with Netflix by offering a broader streaming package.
The outstanding question revolves around the payment for the remaining stake in Hulu. In 2019, Disney and Comcast agreed on a minimum value of $27.5 billion, but determining an exact price involves complex considerations. Valuation factors include Hulu’s synergy with Disney’s other streaming services, such as Hulu + Live TV and Disney+, and the inclusion of Disney basic cable network FX on Hulu.
Analysts suggest a starting point of $35 billion for Hulu’s valuation, while estimates range up to $40 billion. Potential financial challenges for Disney may be mitigated by the enhanced value Hulu brings to their streaming business. The resolution of this situation could also alleviate pressure on Disney’s stock price and provide clarity for Hulu’s future within the company.
