Summary
Comcast Corporation (CMCSA) announced a significant shift in its relationship with Hulu, LLC, transferring operational control of the streaming service to The Walt Disney Company, effective immediately. This move is part of a broader agreement that outlines a future put/call arrangement for Comcast's 33% stake in Hulu. As early as January 2024, either Disney can compel Comcast to sell its stake, or Comcast can compel Disney to buy it, at fair market value. This valuation will be determined by independent experts but will have a minimum floor of $27.5 billion for Hulu's total equity value.
Key Highlights
- 1Disney assumes operational control of Hulu.
- 2A put/call option is established for Comcast's 33% stake in Hulu, exercisable from January 2024.
- 3Comcast's 33% stake in Hulu will be valued at fair market value, with a minimum total equity floor of $27.5 billion.
- 4Comcast and Disney will jointly fund Hulu's recent acquisition of AT&T's 9.5% stake pro rata.
- 5Comcast's future funding of Hulu capital calls is subject to dilution, with a 21% ownership floor.
- 6Hulu's capital calls will be capped at $1.5 billion per year.
- 7The Hulu+ license for NBCUniversal content is extended until late 2024.
Frequently Asked Questions
Comcast has transferred operational control of Hulu to The Walt Disney Company, while retaining a 33% ownership stake. This change is effective immediately.
Starting in January 2024, either Disney can force Comcast to sell its 33% stake, or Comcast can force Disney to buy it. The price will be the fair market value at that time, with a minimum total equity valuation for Hulu set at $27.5 billion.
Comcast and Disney will fund this acquisition proportionally based on their current ownership interests (two-thirds for Disney and one-third for Comcast).
Comcast has the option to fund its share of future capital calls. If it chooses not to fund, its ownership percentage may be diluted, but it is protected by a floor of 21% ownership.