Disney to buy remaining third of Hulu from Comcast

Walt Disney on Wednesday formally began the process of buying Comcast's one-third stake in Hulu, a deal that will give Disney full ownership of the streaming service and freedom to incorporate it into the Disney+ streaming service. 

Disney said it expected to pay NBCUniversal (NBCU) parent Comcast about $8.61 billion by Dec. 1. This represents NBCU's percentage of the $27.5 billion guaranteed floor value for Hulu when it agreed to sell its stake to Disney in 2019, minus the anticipated outstanding capital call contributions payable by NBCU to Disney.

Under the 2019 deal, either NBCU or Disney could initiate the transaction as soon as Nov. 1 - a timetable that was accelerated from the initial date of January 2024.

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Burbank, California-based entertainment conglomerate Disney gained a controlling interest in Hulu as part of its $71 billion acquisition of 21st Century Fox's film and television assets. The transaction gave the studio a competitive leg up in the streaming wars.

Disney Chief Executive Bob Iger in August told investors the company was making extensive Hulu content available to bundle subscribers, with the company moving closer to having one app in the U.S. that combines the general entertainment content of Hulu with content from Disney’s other brands and franchises for bundle subscribers.

In remarks at a Goldman Sachs conference this fall, Comcast CEO Brian Roberts called Hulu a "scarce kingmaker asset" that is "way more valuable today" than when the deal was initially struck.

Hulu had 48.3 million subscribers at the end of Disney's third quarter, compared with 28 million paid subscribers for Comcast's Peacock streaming service at the end of Comcast's third quarter. Disney+ had 146.1 million global subscribers at the end of Disney's third quarter.

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Disney ended its third quarter with more than $11 billion of cash on its balance sheet.

Disney said Hulu's equity fair value will be assessed as of Sept. 30, 2023, under agreed terms. If the value is determined to be greater than the guaranteed floor value, Disney will pay NBCU the difference.

Bankers representing each party will assess Hulu's fair market value, according to regulatory filings.

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While the timing of the appraisal process is uncertain, Disney anticipates it to be completed in 2024.