Disney to Acquire Remaining Hulu Stake from Comcast for $8.6 Billion
Disney has confirmed plans to purchase the remaining 33% stake in the streaming service Hulu from Comcast. This strategic move will grant Disney complete ownership of Hulu, providing them the ability to integrate it into their Disney+ platform. The acquisition is estimated to cost approximately $8.6 billion.
The completion of this takeover is significant for Disney, which has been facing stiff competition in the streaming market and seeks to enhance its subscriber numbers. In the United States, Disney has been offering bundled packages, including Hulu, alongside its Disney+ and ESPN+ platforms. In the UK, some Hulu content is already accessible through the Disney+ app.
The price tag for the acquisition aligns with the “guaranteed floor value” set when Disney acquired a majority stake in Hulu as part of its massive deal with 21st Century Fox in 2019. An agreement between Disney and Comcast stipulated that both companies had the right to trigger the sale of Comcast’s Hulu stake. While Comcast expressed interest in such a deal, Hulu’s significant successes, including popular shows like “Only Murders in the Building,” contributed to its increased value.
Disney anticipates finalising the agreement by December 1, with ongoing negotiations with Comcast, the parent company of NBC Universal. Disney has stated that if Hulu’s current value surpasses the guaranteed price, they will pay NBC Universal the difference.
Hulu currently boasts around 48.3 million subscribers, while Disney has 146.1 million subscribers globally. Disney’s CEO, Bob Iger, previously outlined a vision for a consolidated app in the US that could combine content from various Disney-owned brands.
As the world emerged from pandemic-related lockdowns, the competition for audience attention in the streaming industry became intense. Disney reported declining profits in August due to multiple challenges, including underperforming films and a sharp reduction in advertising sales on traditional television. Despite a 4% year-on-year growth in revenue, the company posted a loss of $460 million compared to a $1.4 billion profit in the same period the previous year.
The streaming industry at large has been exploring ways to boost revenue and tackle password-sharing issues. Additionally, the film and television sectors have faced production disruptions due to strikes in the US, slowing down the creation of new content.