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Disney and Comcast announced today that Disney will assume full operational control of Hulu, effective immediately.
In return, Disney and Comcast entered into a “put/call” agree regarding NBCUniversal’s 33% ownership interest in Hulu. The deal puts a minimum future valuation on Hulu of $27.5 billion.
Reporters gathered in New York for the Disney upfront press conference were startled by the news, announced verbally by a Disney rep as the event was beginning and the press release was hitting the wire. At the same time, it had also been widely expected given Disney’s strategic push into streaming and its description of Hulu as one of “three legs of the stool” along with Disney+ and ESPN+. Disney+ is set to launch in November, with a $7 price point that has immediately made it a noteworthy attempt to slow the momentum of Netflix.
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Hulu, which managed to evolve since its 2007 creation despite an unusual multi-company ownership structure, has seen dramatic subscriber growth of late, reporting earlier this month 28 million total subscribers across its live-TV and on-demand offerings. Its advertising revenue has also surged, with half of subscribers opting for the basic, ad-supported tier of Hulu on demand.
The $71.3 billion transaction that saw Disney acquire Fox’s Hulu stake along with studio and network assets, which closed in March, set things in motion for a full roll-up of Hulu. The streaming service’s original programming, highlighted by the Emmy-winning Handmaid’s Tale, and vast library of film and TV titles, including “catch-up” titles that hit the streaming service soon after linear premiere, make it a valuable chess piece for Disney. Given the family-friendly nature of Disney+, more adult-oriented fare created under Disney’s ownership — including potentially film franchises like Deadpool — will find a home on Hulu.
Under the put/call agreement, as early as January 2024, Comcast can require Disney to buy NBCUniversal’s interest in Hulu and Disney can require NBCUniversal to sell that interest to Disney for its fair market value at that future time, the release said. Hulu’s fair market value will be assessed by independent experts but Disney has guaranteed a sale price for Comcast that represents a minimum total equity value of Hulu at that time of $27.5 billion.
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