Comcast and Disney have each hired an investment bank to help decide the value of Hulu. This is the latest development in the years-long sale of Comcast’s minority stake in Hulu to Disney.
Following Disney’s purchase of 21st Century Fox in 2017, Comcast and Disney put in place an agreement that would allow either side to force through a sale. While that element of the agreement wasn’t expected to be triggered before January 2024, the timeline was recently pushed forward to help complete the deal sooner.
However, the two companies value Hulu differently, and as part of that valuation process, both Comcast and Disney have now brought in the help of an investment bank. According to CNBC, Comcast has hired Morgan Stanley to help with its valuation while Disney has hired JPMorgan Chase.
With each investment bank tasked with providing its own fair evaluation of Hulu, it is expected that, providing the two valuations are within a close enough range, a final price for Comcast’s share can be agreed. According to CNBC, the average of the two banks’ determinations will be used, providing the two valuations are within 10% of each other.
If, for some reason, the two valuations are too far apart, it is understood that a third bank will be called in to add their own valuation to the mix. This third evaluation would then be averaged with the closest valuation from the original two banks.
As Comcast only owns one-third of Hulu, Disney would then be expected to pay one-third of that final price to complete the sale. Considering the original agreement set $27.5 billion at the minimum valuation, it is expected that the final valuation will be at least this, if not higher.
Earlier today, the price consumers pay for Hulu increased. While the ad-supported plan saw no change, the cost of ad-free Hulu increased to $17.99 a month. The cost of a Hulu Live TV subscription also increased, up from $69.99 to $76.99 a month.