Executives at the Walt Disney Company and Comcast Corporation this week expressed interesting in buying each other out of the streaming general entertainment service Hulu.
The comments were made at the Goldman Sachs Communacopia and Technology conference this week, during which Disney’s Chief Executive Officer Robert Chapek and Comcast’s Chief Executive Officer Brian Roberts were asked to weigh in on the company that each holds a stake in.
Hulu began more than a decade ago as a joint venture that was evenly split between three of the country’s four major broadcast operations: Disney (ABC), Comcast (NBC) and 21st Century Fox. A 10 percent minority stake has changed between companies over the course of several years.
In 2019, Disney acquired Fox’s 30 percent share of Hulu as part of a broader purchase of certain Fox assets, including its content library, film studios and some cable networks. That same year, Time Warner sold its 10 percent stake in Hulu, leaving Disney with 67 percent of the company and Comcast with 33 percent. Disney eventually affirmed it would buy out Comcast’s portion of Hulu by 2024.
What Disney will pay for the remaining stake in Hulu depends in large part on how successful the entertainment giant makes the streaming service: The more advertising revenue Hulu brings in and the more subscribers it has, the higher the purchase price will go.
On Wednesday, Disney’s Chapek said the company would be very interested in purchasing Hulu prior to the 2024 deadline if Comcast was amenable to a sale. Such a move would allow Disney to integrate Hulu’s content into its other flagship streaming service, Disney Plus, the way the company has done with its international version of Disney Plus.
“We would love to get to the end point earlier, but that obviously takes some level of propensity for the other party to have reasonable terms for us to get there,” Chapek said. “If we could get there, I would be more than happy to try to facilitate that.”
Surprisingly, Disney is not the only side interested in acquiring Hulu outright: On Thursday, Comcast’s Roberts said the company would be interested in bidding for the service if Disney were ever to put it up for sale.
“Hulu is a phenomenal business, and I think I read somewhere it’s gotten to 50 million customers,” Roberts said. “Its scale is fantastic. It has wonderful content. And I believe if it was for sale, put up for sale, Comcast would be interested, and so would a lot of other tech and media companies, and you would have a robust auction.”
Less clear is exactly how much both Disney and Comcast value the company as it stands today. Roberts said the company is currently entitled to one-third of the streaming service’s equity, a number that will grow to 100 percent if Disney goes through with its plans to acquire the service outright in two years.
That valuation could go down in part due to a recent decision by Comcast to shift its prime-time programming from Hulu to Peacock, Comcast’s own general entertainment streaming service that competes with Disney’s products in the domestic market. In August, several NBC shows were among the most-watched content on Hulu, which also offers prime-time programs from ABC and Fox. Older NBC content is expected to remain on Hulu through a separate agreement with the streamer.
