Walt Disney Co. (NYSE: DIS) and Comcast Corp. (NASDAQ: CMCSA) have announced a deal for Disney to purchase Comcast’s stake in Hulu that will allow Disney to take “full operational control” of the streaming service, effective immediately. As part of the deal, Disney has agreed to pay Comcast for its Hulu content for the next five years.
In 2024, Comcast will be allowed to sell its 33 percent stake in Hulu to Disney. Disney has guaranteed that the sale price will reflect a minimum total equity value of $27.5 billion for Hulu at that time. That means Comcast is guaranteed at least $5.8 billion for its Hulu stake under the agreement.
Disney CEO Bob Iger said in a statement, “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. 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.”
Comcast has agreed to extend Hulu’s license of NBCUniversal content through late 2024. In one year, NBCUniversal will have the option to run some of its content currently exclusively licensed to Hulu in exchange for a reduced license fee. The network has been given the option of ending most of its content license agreements with Hulu in three years. According to the announcement, NBC channels will also be on Hulu Live at a higher rate than previously agreed.
Hulu was originally a joint venture between Disney, 21st Century Fox, Comcast’s NBCUniversal and Time Warner (now WarnerMedia), with no one company having majority control. Disney assumed majority control when it closed a deal for most of Fox’s assets in March. Last month, WarnerMedia agreed to sell its 9.5 percent interest in the streaming service back to Hulu in a deal funded by Disney and Comcast in accordance with their two-thirds to one-third ownership.