Disney announced it plans to purchase the remaining one-third stake in Hulu from Comcast’s NBCUniversal in a move that has been widely expected. The announcement follows Disney’s acquisition of Fox’s entertainment assets in 2019, which gave the entertainment giant two-thirds of streaming service Hulu. Disney, which is expected to pay at least $8.61 billion for the remaining stake, currently offers the Hulu service as part of a streaming bundle with its Disney+ and ESPN+ platforms. “The acquisition of Comcast’s stake in Hulu at fair market value will further Disney’s streaming objectives,” explained the company in a press release.

The acquisition is scheduled for December 1, “following Comcast’s November 1 exercise of its right under the put/call arrangement between the two companies,” notes the release.

The deal is valued at “approximately $8.61 billion, representing NBCU’s percentage of the $27.5 billion guaranteed floor value for Hulu that was set when the companies entered into their agreement in 2019 minus the anticipated outstanding capital call contributions payable by NBCU to Disney.”

“Wednesday’s deal brings to an end long-running speculation about the fate of Hulu,” notes CNN, “but still requires an appraisal process that is expected to be completed in 2024 to further assess the streaming service’s fair value before a final sale price tag is agreed upon.”

During a May earnings call, Disney CEO Bob Iger revealed the company was considering combining Disney+ and Hulu into a “unified streaming experience.”

The subscription-based streaming service launched in October 2007 through a joint arrangement between 21st Century Fox, Comcast and Time Warner. The media units of those companies have been focused on their own streaming platforms in recent years.

“Why is Hulu a long-term strategic asset worth retaining for Disney?” asks Variety. “The service will help the company’s streaming bundles with Disney+ and Hulu reduce churn and boost pricing power, according to Morgan Stanley analyst Benjamin Swinburne. That’s ‘key to scaling streaming revenues against a largely fixed cost base,’ he wrote in a recent research note.”

Related:
Disney Says It Will Take Full Control of Hulu, The New York Times, 11/1/23
Disney to Buy Out Comcast’s Hulu Stake for at Least $8.6 Billion, Deadline, 11/1/23