The timeline for deciding Hulu’s ownership has been unexpectedly accelerated, according to Comcast CEO Brian Roberts. The discussions between Comcast and Disney, which will include an appraisal process, are now set to begin on September 30, several months before the original January 2024 deadline. This agreement stems from the 2019 deal in which Comcast could compel Disney to buy its remaining 33% stake or vice versa. The guaranteed minimum equity value for this stake is set at $27.5 billion. With Hulu’s exponential growth since the agreement, Roberts believes the valuation could easily surpass this hypothetical amount.
Roberts praises Hulu as a highly successful streaming business, second only to Netflix, which boasts a market capitalization of $200 billion. The impending deal between Comcast and Disney marks the first-ever sale of a streaming service of this magnitude. Each company will appoint their own appraiser, with the possibility of bringing in a third party if valuations significantly differ. In considering Hulu’s value, Roberts emphasizes that its content, particularly that provided by Disney, must be taken into account. Additionally, the fact that Hulu is bundled with Disney’s other services, namely Disney+ and ESPN+, reduces the likelihood of subscriber churn. Roberts also suggests that synergies associated with Hulu could be worth “a couple billion dollars,” offering even more value to potential buyers.
Roberts believes that if Hulu were to be sold in its current state, there would be significant interest from potential buyers due to its vast content library and bundling capabilities. He asserts that this business opportunity is unprecedented and unique in the streaming industry. While the exact monetary value of these opportunities is yet to be determined, Roberts speculates that the combined benefits of synergy and reduced churn could add up to $30 billion.
The topic of Hulu’s valuation has been a focal point for both Comcast and Disney for several years. The companies have been engaged in discussions to determine the worth of the streaming service, as previously reported by CNBC. Comcast’s Roberts and Disney’s CEO Bob Iger have faced numerous questions about the future of Hulu. In May, Roberts indicated that Comcast would likely sell its stake to Disney at the start of 2024, suggesting the final price would exceed the initial valuation.
As the ownership deadline draws nearer, Comcast’s NBCUniversal has made strategic content shifts by removing shows, such as “Saturday Night Live,” from Hulu and exclusively streaming them on its own platform, Peacock. On the other hand, Disney has made moves to integrate Hulu content into Disney+. This integration aligns with Disney’s aim to provide a unified streaming experience for its users in the United States. The addition of Hulu content to Disney+ allows Disney to maximize its ad-supported option, generating more subscribers and advertising revenue. This decision is viewed as a logical progression in Disney’s streaming strategy, providing greater advertising opportunities and presenting a one-app platform for consumers. The anticipated rollout of this unified platform is expected by the end of this year.
The accelerated discussions regarding Hulu’s ownership have raised expectations and intrigue in the streaming industry. As Comcast and Disney engage in the appraisal process, the valuation of Hulu remains uncertain, but the potential for a highly valuable deal is evident. Hulu’s position as a major streaming player, combined with its content offerings and bundling capabilities, makes it a coveted asset for potential buyers. The outcome of these discussions is sure to have a significant impact on the future landscape of the streaming industry.
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