Comcast & Disney May End Up in Court as They Continue to Fight Over Hulu





The green Hulu logo against a black background

Late last year Disney and Comcast closed a deal that would give Disney full control over Hulu. The problem is that the final price has yet been agreed on, and the two sides are looking for more help to settle the matter.

Both sides are unable to agree on a price for Hulu. Comcast wants more and Disney wants to stick closer to the original valuation of Hulu. According to the Wall Street Journal, the two sides could be headed to court soon as they fight over the price of Hulu.

In an SEC filing last year Disney disclosed that the companies will both hire outside investment banking firms to come up with a sale price. Those two firms’ valuation will be used to set the final sale price for Disney to buy Comcast’s share of Hulu.

If the two valuations are not within 10% of each other, the two firms will then select a third firm to determine its own figure. The ultimate sale price will come from the average of the two estimates that are closest in value to each other.

Here is how Disney says the firms will come up with a price:

The appraisers shall take into account factors they determine relevant to valuation and certain specific factors, including, among others, Hulu’s historical financial and operating results, which shall be based solely on audited financial statements; that Hulu is valued as a going concern, carrying on its existing business activities; and Hulu’s future business prospects and projected financial and operating results, assuming that the assets, contract rights and intellectual property used in Hulu’s business that are provided by Disney will be continued and available to Hulu in a manner and on terms consistent with past practice.

The two sides still can’t reach a deal as, according to a report from Reuters, Disney and Comcast are looking for an advisor to resolve the Hulu valuation question.

The companies set a valuation of $27.5 billion five years ago. But Comcast CEO Brain Roberts, speaking at the Goldman Sachs Communacopia + Technology investor conference last year, said Hulu is “way more valuable” now. Comcast is hoping for as high a valuation as possible, even as Disney hopes it’ll be closer to the $27.5 billion mark.

The problem is that JPMorgan, whom Disney hired, agrees with the $27.5 billion valuation. Morgan Stanley valued Hulu at more than $40 billion in Comcast’s valuation. Now, according to Wall Street Journal, both sides are looking at a third party to resolve this issue, but a court fight is very possible. The question is, will the third party be able to give an answer both sides will be happy with?

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