Disney and Comcast in stalemate over Hulu's valuation – report

Disney and Comcast have reportedly reached an impasse on the value of Hulu, a figure that will determine how much Disney ultimately will pay for Comcast's one-third stake in the premium streaming service.

Jeff Baumgartner, Senior Editor

June 3, 2024

2 Min Read
Disney Plus with Hulu screenshot taken March 27, 2024
(Source: Disney)

The Walt Disney Company and Comcast/NBCUniversal have reached an impasse on the value of Hulu, the Disney-owned streaming service, The Wall Street Journal reported late last week.

NBCU has expressed a "significant disagreement" about how to value Hulu, raising the possibility of a potential court clash, the paper added, citing people familiar with the situation.

The quarrel arises as the companies go through a complex process to determine how much Disney should pay for the remaining one-third of Hulu still held by Comcast/NBCU. According to the WSJ, Comcast believes its stake is worth more than $40 million versus Disney's estimate of about $27.5 billion, the "floor price" the companies had set under an agreement made in 2019.

Those estimates are being presented to RBC Capital to make an independent appraisal of Hulu's value, the publication added.

To kick off the payment process for that stake, Comcast collected an $8.5 billion check on December 1, 2023, reflecting the floor price on Hulu's value.

Hulu's appraisal process continues

The price Disney ultimately pays for NBCU's stake is expected to rise above that figure amid the independent appraisal that's underway. If the value is determined to be greater than the guaranteed floor value, Disney will pay NBCU a percentage of the difference. According to the WSJ, Disney's payment to Comcast "will be determined by averaging that figure with whichever company's estimate is closest."

Related:Disney CEO says streaming can be a 'growth business'

It's expected that the appraisal process, which will factor in Hulu's standalone tech platform along with the value of Hulu's content and bundling components, will be completed sometime this year.

Hulu is a key component in Disney's streaming strategy and its plan to make its streaming business profitable.

Following a beta test period that got underway late last year, Disney moved ahead in March with the commercial launch of a revamped Disney+ app that weaves in content from the Hulu subscription video-on-demand service. Subscribers to both streaming services now have access to the Hulu SVoD service in the new Disney+ app.

Disney CEO Bob Iger recently reiterated that Disney's streaming business will be profitable in its fiscal Q4 of 2024.

Disney is working to improve the overall performance of its direct-to-consumer streaming business by focusing on new tools, such as recommendation engines, to help lower churn and reduce marketing and customer acquisition costs. Disney is also expected to start cracking down on password sharing later this month.

Related:Disney launches app combining Disney+ with Hulu

"In June we'll be launching our first real foray into password sharing," Iger said in April. The rollout will start in a "few countries" and then expand to a full rollout in September, he said.

About the Author(s)

Jeff Baumgartner

Senior Editor, Light Reading

Jeff Baumgartner is a Senior Editor for Light Reading and is responsible for the day-to-day news coverage and analysis of the cable and video sectors. Follow him on X and LinkedIn.

Baumgartner also served as Site Editor for Light Reading Cable from 2007-2013. In between his two stints at Light Reading, he led tech coverage for Multichannel News and was a regular contributor to Broadcasting + Cable. Baumgartner was named to the 2018 class of the Cable TV Pioneers.

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