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Wednesday, September 6, 2023

Disney and Comcast Accelerating Hulu Negotiations

 by Ray Keating



September 6, 2023


Comcast and Disney have agreed to accelerate matters when it comes to finalizing their deal for Disney to purchase the remaining 33 percent of Hulu that Comcast owns. 

According to The Wall Street Journal


Last week, Disney and Comcast decided to move up the date on which either company can force a sale of the cable company’s Hulu stake to Sept. 30, Roberts told investors at Goldman Sachs’s Communacopia and Technology investor conference in San Francisco. Doing so will provide investors of both companies better clarity of what it will mean for them, he said.


As DisneyBizJournal has reported, “Comcast still owns 33 percent of Hulu, with Disney controlling the rest, gaining Fox’s 33 percent Hulu stake in the 2019 acquisition of Fox. As it stands now, Comcast has a passive role in Hulu and has agreed to hold that position until 2024. After that, Comcast can force a buyout by Disney based on a total valuation of $27.5 billion – with Comcast then getting more than $9 billion from Disney – or Disney could choose to execute the buyout. That price tag, however, could go higher if an independent party determines that the fair market value is, in fact, higher.”


Roberts, of course, is publicly pushing that the value of Hulu is far higher than that $27.5 billion. CNBC reported:


“We are excited to get this resolved,” Roberts said Wednesday at Goldman Sachs’ Communacopia and Technology conference. “And the minimum $27.5 billion that people have bandied about, that was a hypothetical that we picked five years ago because Disney has control of the company. The company is way more valuable today than it was then.”


It also was noted in the report, “The deal between Disney and Comcast has set up, in essence, the first-ever sale of a streaming service of this magnitude, Roberts said Wednesday. The two companies will each have their own appraiser, and if their valuations are far apart, a third will likely be brought in.”


As noted by the Journal, it’s unclear how long such an appraisal process might take.


In its most recent earnings report, Disney reported that Hulu had 48.3 million subscribers.




Ray Keating is the editor, publisher and economist for DisneyBizJournal.com; and author of the Pastor Stephen Grant thrillers and mysteries, the Alliance of Saint Michael novels, and assorted nonfiction books. Have Ray Keating speak your group, business, school, church, or organization. Email him at raykeating@keatingreports.com.


The views expressed here are his own – after all, no one else should be held responsible for this stuff, right? (Keating is a Disney shareholder.)


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