Disney’s Hulu Deal Might Be More Expensive Than Expected
By Movieguide® Contributor
Disney and Comcast are still at loggerheads as they negotiate a price for Hulu, with Disney claiming it may have to pay $5 billion more for the streamer than expected.
Disney and Hulu have been partners for years, but it wasn’t until last year that they started negotiations to buy Comcast/NBCU’s stake in Hulu. In 2023, the company announced they would shell out $8.61 billion for Comcast’s stake in Hulu.
“The acquisition of Comcast’s stake in Hulu at fair market value will further Disney’s streaming objectives,” Disney said of the planned acquisition.
Movieguide® previously reported on Disney and Hulu’s deal:
Disney revealed that it plans to buy out Comcast’s 33% stake in Hulu for an expected $8.61 billion to take full ownership of the streaming site.
Disney has been seriously considering buying out Comcast’s stake in Hulu since Bob Iger returned as CEO last year and made streaming the company’s top priority. Any action on this desire has been impossible before now because of an agreement that only allowed these talks to start in January 2024.
However, the two companies accelerated the timeline so they could begin talks of a buyout at the end of September. This altered an agreement made in 2019 that allowed Disney to force Comcast to sell its stake at a later date for a fair market value that set Hulu’s total value at $27.5 billion.
However, the deal has stalled as both sides continue to fight over Hulu’s value.
Disney’s initial appraisal of Hulu’s value set the streamer somewhere below its $27.5 billion guaranteed floor value, while NBCU’s appraiser valued the company “substantially in excess of the guaranteed floor value,” per Variety.
In May of 2024, both parties entered into a “confidential arbitration” and put a new set of rules into place — “if the two sides’ valuations were not within 10% of each other, the banks they enlisted for the transaction would pick a third firm to make another estimate, and Hulu’s final valuation will be the average of the two figures that are closest to each other,” according to Variety.
If NBCU’s valuation is deemed valid and consistent with a third-party appraiser’s opinion, Disney may be forced to pay up to $5 billion more than expected.
“The outcome of the arbitration is uncertain and we cannot reasonably estimate the impact of the arbitration on the appraisal process, and thus any impact on the determination of Hulu’s equity fair value and any additional amount we may be required to pay to acquire NBCU’s interest in Hulu,” a statement from Disney reads.
