Disney Wrestles Full Control Of Hulu As Comcast Taps Out In Streaming Deal
A company that was voted the worst in America in a poll (twice, actually) is ceding control of Hulu, the streaming giant that is on a mission to let the world know it has live sports (I can't watch an NBA playoff game without that message being repeatedly hammered home), so that it can join the happiest place on earth. Or put another way, Disney is assuming full operational control of Hulu in a streaming deal reached with Comcast.
The move is effective immediately, the company's involved announced today. As part of the deal Comcast is entering in a "put/call" agreement regarding NBCUniversal's 33 percent ownership interest in Hulu, paving the way for Disney to purchase the shares five years from now.
"Under the put/call agreement, as early as January 2024, Comcast can require Disney to buy NBCUniversal’s interest in Hulu and Disney can require NBCUniversal to sell that interest to Disney for its fair market value at that future time. Hulu’s fair market value will be assessed by independent experts but Disney has guaranteed a sale price for Comcast that represents a minimum total equity value of Hulu at that time of $27.5 billion," the company's said.
It gets a little confusing because of all the names involved—there are companies, parent companies, and firms that are intertwined as part of previous deals. This move, however, is a sort of power play in the streaming space.
According to CNBC, Comcast originally wanted to price its NBCUniversal streaming service at around $12 per month. However, Disney threw a wrench into those plans when it recently priced its own service at $6.99 per month. Comcast then decided to lower its price, which will probably be closer to $10 per month, when the service is finalized.
That service will only allow people to watch previous seasons of TV shows on demand. Those who have a cable or satellite TV subscription will be able to watch for free, and also enjoy streaming live TV from NBCUniversal channels.
As for Hulu, it has access to NBCUniversal's catalog for the next three years, after which Comcast can choose not to renew the agreement.
"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," Disney CEO Bob Iger said in a statement. "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."
Those brands Iger references are significant. Disney acquired Marvel Entertainment at the end of 2009 for $4.24 billion, then three years later it bought Lucasfilm for $4.05 billion, which put the mega Star Wars franchise under the Disney banner.
That's just the tip of a very big ice berg, though. The folks at Cartoon Brew put together a massive infographic showing all of the entities that fall under the Disney umbrella, including ones it has a partial stake in (like ESPN). In five years time, Disney could add Hulu to its collection of assets. In the meantime, it has full control over the streaming service's operations.