If it wasn’t already clear that Disney is very serious about becoming one of the major players in the video streaming business, then Disney’s newest move should drive that point home.
The company on Tuesday announced that it will assume full operational control of the Hulu streaming service following a “put/call” deal with Comcast. What that means is that the two giants agreed that Disney will buy Hulu five years from now at a minimum valuation of $27.5 billion.
As early as January 2024, Comcast can require Disney to buy NBCUniversal’s 33% ownership for its market value at the time. Similarly, Disney can require NBCUniversal to sell its Hulu stake at the time. Hulu’s value will be assessed by independent experts, Deadline explains, although Comcast will get a minimum of $27.5 billion out of the deal.
The two companies agreed to fund Hulu’s recent purchase of AT&T’s 9.5% stake in Hulu, pro rata to their two thirds/one third ownership interests. Comcast will also have the option to keep funding Hulu during future capital calls.
Furthermore, Comcast also agreed to extend Hulu’s license of NBCUniversal content and the Hulu Live carriage agreement for NBCUniversal channels until late 2024 and to distribute Hulu on its Xfinity X1 platform. NBCUniversal can still terminate its content license agreements with Hulu in three years. In one year, NBCUniversal will have the right to exhibit on its own OTT with some content that is currently exclusive to Hulu in return for reducing the license fee that Hulu pays.
In other words, the terms of the deal are as complicated as you’d expect. But what matters here is that Disney will be in full control of the popular streaming service. Hulu will be Disney’s third streaming service, with the list including Disney+ and ESPN+. Of the three, only Disney+ is not available to consumers, but the service is set to launch in November.
With Hulu under Disney’s control, you can expect more original Disney content to hit the service, including the four Marvel animated series that were recently announced.