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Disney Gains Full Control Of Hulu In Landmark Deal With Comcast

The house of mouse has added yet another streaming service to its massive portfolio.

Disney and Comcast announced today that a landmark deal has been reached, which will see Disney assume full operational control of Hulu.

The companies locked into a “put/call” agreement regarding NBCUniversal’s 33% ownership interest in Hulu. The deal puts a minimum future valuation on Hulu of $27.5 billion, with control transferring to Disney immediately and the financial transaction slated to take effect in 2024.

The deal was widely expected to occur following Disney’s presentation of its own streaming service, Disney+, where it called Hulu, ESPN+, and Disney+, its “three legs of the stool.” The news was initially announced today at the Disney upfront press conference as the press release was hitting the wire.

“Hulu represents the best of television, with its incredible array of award-winning original content, rich library of popular series and movies, and live TV offerings,” Disney CEO Bob Iger said in a statement. “We are now able to completely integrate Hulu into our direct-to-consumer business and leverage the full power of The Walt Disney Company’s brands and creative engines to make the service even more compelling and a greater value for consumers.”  

Under the put/call agreement, Comcast can require Disney to buy NBCUniversal’s interest in Hulu and Disney can require NBCUniversal to sell that interest to Disney for its fair market value at that future time. Hulu’s fair market value will be assessed by independent experts but Disney has guaranteed a sale price for Comcast that represents a minimum total equity value of Hulu at that time of $27.5 billion.

Both conglomerates have agreed to fund Hulu’s recent purchase of AT&T Inc.’s 9.5% interest in Hulu, pro rata to their current two thirds/one third ownership interests. In the future, Comcast will have the option but not the obligation to fund its proportionate share of Hulu’s future capital calls and will be diluted if it elects not to fund.

Hulu has experienced a dramatic subscriber growth of late, reporting earlier this month 28 million total subscribers across its live-TV and on-demand offerings. Its advertising revenue has also surged, with half of subscribers opting for the basic, ad-supported tier of Hulu on demand.

With full control, Disney is expected to use Hulu for its more adult-oriented content, in contrast to the more family-friendly content that will be seen on Disney+. One rumor I had heard is that Deadpool could find a home on the streaming service, aside from still maintaining a spot in theatres. The move also adds more context to the influx of Marvel content that will soon hit Hulu, as Disney will now own both companies.

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