If you are just tuning in, Disney and Comcast are embroiled in a dispute over the future of Hulu. More specifically, how much one Hulu is worth in the current market? According to a recent Wall Street Journal report, the dispute runs deeper and wider than first thought, so here’s a summary of what’s reportedly gone on and now going on.
Hulu is currently owned by Disney and Comcast, although the ownership is a little one-sided following Disney’s acquisition of 21st Century Fox which made it the majority stakeholder. Since that deal, it has become clear Comcast will eventually sell its one-third share in Hulu to Disney.
That seems to be pretty much agreed on, and that’s also where the first major revelation from the new report comes in.
It would seem that while Comcast and Disney agree that a deal should be done, both reportedly have wildly different views on the valuation. According to the unnamed sources in the report, the differences in valuation are tens of billions of dollars different. Naturally, that’s a major hurdle to overcome.
Apparently, NBCUniversal executives previously valued Hulu at around $70 billion. The report says the valuation was made in 2021 (during the pandemic’s streaming boom) and will be looked at again by both companies in 2024. If their updated valuations are not more in line, a third-party is expected to provide its own independent valuation.
Once some form of agreement is made on the value, it is expected that the deal will be done.
A bumpy road to get here
Back in the day when Hulu was owned by Comcast, Disney, and Fox, things were seemingly more amicable. However, once Disney took over Fox, the situation quickly became complicated with Disney reportedly looking to phase Comcast out, and in more ways than one.
According to the report, Disney and Fox moved quickly to block Comcast from being able to veto any major decisions or deals made with channel and content owners. Something, the report suggests Comcast didn’t become privy to until after the change had happened.
Naturally, Comcast is understood to have been less than happy about the situation, with the suggestion that it was willing to take its grievance to court.
Speaking of grievances, the report also highlights how Comcast initially tried to block Disney from purchasing Fox’s assets. This even led to an escalation in how much those assets were eventually sold to Disney for.
In the end, Comcast didn’t act on its legal threats and it is now suggested that the reason it didn’t go to court was the company’s belief that Disney would launch Hulu internationally, increasing its value in the process. As we know, that’s not what happened.
Hulu hasn’t launched in international markets. Instead Disney went on to make the Star brand the face of its general entertainment product. This, Comcast reportedly argues, actually hurt Hulu and its valuation
More recently, Comcast has reportedly stopped financially supporting Hulu, resulting in Disney making use of the equivalent of a bridge loan to keep things going. This is in addition to NBCUniversal moving its next-day NBC programming from Hulu to Peacock. For those unaware, Comcast owns Peacock.
The end is getting closer
While the road to here has been bumpy, it is one which is being traveled, and one which should eventually lead to a final destination.
As mentioned, both parties seem keen on a deal being done, with the amount the major hurdle right now. Once that is settled, either between Disney and Comcast, or by a third-party valuation, the sale is expected to go through.
In fact, Disney only very recently confirmed that it plans to launch a unified Disney Plus and Hulu app experience in late 2023. So while things might have stalled a little recently, Disney is making moves to better integrate Hulu with its other products and services.