Comcast and Disney have yet to agree on a final sale price for the cable company’s 33% share of Hulu, but new data suggests the streaming service is more valuable than the two companies estimated.
“Based on our conservative projection, we believe that Hulu may be valued at $45 billion,” Seeking Alpha analysts said in a report.
For context, in 2019, the streaming services had an estimated value of $27.5 billion, according to the report, valuing Comcast’s share at about $9.07 billion. In September, Comcast wanted Disney to fork over $30 billion for its share. If Hulu’s actual value lines up with Seeking Alpha’s predictions, it’s possible Comcast could ask for more money.
In a September SEC filing, Disney said that the companies will both hire outside investment banking firms to come up with a sale price if the two parties couldn’t agree on a dollar amount. Originally the deal’s timeline was for January 2024, but Comcast pushed the date up to September to begin the process.
The sale would give Disney full ownership of Hulu, as opposed to its current majority holding. Reports suggest that Disney’s plans to combine Hulu and Disney+ by the end of the year could strengthen the chances of a deal.
In addition, the cash from the potential sale could help Comcast pay down some of its debt. As of the second quarter, the company had $262.1 billion in assets and $95 billion in long-term debt.
Disney has also been working to make its streaming service profitable – aiming to show investors a return by September 2024.
It’s part of a potential bigger transformation of Disney. CEO Bob Iger’s plans to fold Hulu into Disney+ could bring in as many as 150,000 subscribers over the next year and generate millions in revenue, according to previous reports. Disney is also in talks to sell off its India assets. The future of the company’s traditional TV holdings like ABC and FX could also be in question after Iger said they “may not be core” to Disney’s future.
In August, the media giant reported an operating loss for its streaming services — Disney+, Hulu and ESPN+ — as well as a dip in subscribers across a few of its services. It also last week broke out that ESPN generated $2.8 billion in operating profit for the company in fiscal 2022.