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Disney moves forward with buying out Comcast’s stake in Hulu

The home screen of streaming television service Hulu.
The home screen of streaming television service Hulu. (Photo courtesy Walt Disney Company; Graphic designed by The Desk)

The Walt Disney Company says it will acquire the remaining one-third of its general entertainment streaming service Hulu that is held by rival media firm Comcast.

The affirmation came on Wednesday shortly after Comcast said it was exercising its option to sell its minority stake in the service.

As part of the deal, Disney will pay at least $8.61 billion for Hulu, with the final purchase price to be decided by investment banks that both sides have hired to determine Hulu’s valuation through September 30 of this year.

The deal is expected to be finalized next year. Disney will begin making its first payment in December.

Hulu was founded in 2007 as a joint venture between Disney, NBC Universal (later acquired by Comcast) and 21st Century Fox, each holding an equal 30 percent stake in the venture. Numerous companies have held the remaining 10 percent over time, including Providence Equity and Time Warner (later WarnerMedia, which was owned — and then spun off from — AT&T).

In 2019, Disney acquired 60 percent of Hulu through its purchase of certain television and film assets of 21st Century Fox (the remaining assets, including Fox Television Stations, the Fox Broadcast Network and Fox News Media, were formed into the present-day Fox Corporation). Shortly after the acquisition, Time Warner sold its 10 percent stake back to Hulu, bumping Disney’s ownership to 67 percent and Comcast’s to 33 percent.

Comcast later agreed to give Disney complete operational control of Hulu while remaining a minority owner of the service. The agreement allowed Comcast to force Disney to acquire its remaining 33 percent — or gave Disney the option to force Comcast to sell its 33 percent — by 2024, with the purchase price based on the valuation of the streaming service at the time the option was struck.

In July, Disney reported Hulu had around 48 million domestic subscribers who pay between $6 a month and $15 a month for access to its video on-demand library, which includes shows from ABC television, FX, Fox and some third party content libraries. A version of Hulu that offers live access to broadcast and cable stations costs $76 a month and has around 4 million subscribers.

Comcast previously offered some of its content through the on-demand version of Hulu, but moved its shows and movies to its own streaming service, Peacock, last year.

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About the Author:

Matthew Keys

Matthew Keys is the publisher of The Desk and reports on the business and policy matters involving the broadcast television, streaming video and radio industries. He previously worked for Thomson Reuters, Disney-ABC, Tribune Broadcasting and McNaughton Newspapers. Matthew is based in Northern California, has won numerous awards in the field of journalism, and is a member of IRE (Investigative Reporters and Editors).