Next week, on September 30, 2023, Comcast and Disney will start talks for Disney to buy the remaining shares of Hulu that Comcast owns. This would give Disney 100% ownership and is a part of a deal that started years ago. This comes as in 2019, Disney bought out Fox and agreed to buy out Comcast in 2024. Now that deadline is coming up, and the two companies have agreed to move up talks to September 30, 2023.
Disney currently owns a majority of Hulu, with Comcast a minority owner. This deal would see Disney become the 100% owner of Hulu going forward.
So, exactly what is happening, and how will this impact Hulu? Today, we are going to break down everything we know about Comcast’s deal to sell Hulu.
When will Disney buy 100% of Hulu?
Currently, the plan is for Disney to buy Comcast’s share of Hulu in early 2024. Right now, the talks are about laying out a plan and, more importantly, how much Disney will pay for Hulu.
What is Comcast’s share of Hulu worth?
That’s according to Comcast CEO Brain Roberts, who spoke on Wednesday at the Goldman Sachs Communacopia + Technology investor conference. When Hulu and all its assets were assessed by Disney five years ago, it deemed Hulu to be worth $27.5 billion. Roberts argued Hulu is “way more valuable” now compared to then. Now Comcast wants Disney to now pay around $30 billion for its share of Hulu.
“We’ve seen analyst reports that a buyer, depending on who they were, if it was to scale them up, they could have a couple billion dollars, or who knows what, of synergy,” Roberts said. “Just that piece of the synergy and the churn benefit could be worth $30 billion. And that’s before you ascribe any value to the actual Hulu. And of course when you go into one of these really robust auctions — and I think if you were selling all of this as-is — there’d be a line of bidders around the block to actually buy all the content, all the bundling of Hulu, that business we’ve never seen. And so usually buyers in robust auctions pay for it all, and the seller gets all the benefits of the synergy.”
How will the two sides come up with a price?
In an SEC filing earlier this month, 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 come up 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.
What will this mean for Hulu subscribers?
For now, very little will change on Hulu as Disney has had full control of Hulu since 2019. At that time, Comcast gave up its board seats to Disney in exchange for this deal to have Disney buy all of Hulu in 2024.
Comcast has also moved most of its content over to Peacock. So this likely means for the foreseeable future, very little is expected to change with this sale at least for its subscribers.
The questions come down the road once Disney can do what it wants with Hulu without needing to give Comcast a cut of the profit. For now, though we will have to wait and see what happens.