Summary
The Walt Disney Company (DIS) has announced a significant development regarding its ownership and operational control of Hulu, LLC. Effective immediately, Disney will assume operational control of Hulu. This move solidifies Disney's strategic position in the streaming landscape, particularly as it prepares to launch its own direct-to-consumer streaming service, Disney+. Furthermore, a put/call arrangement has been established with Comcast, outlining a future transaction where Disney can acquire Comcast's 33% stake in Hulu as early as January 2024, or Comcast can require Disney to purchase it. This transaction will be based on Hulu's fair market value at that future time, with a minimum total equity valuation floor of $27.5 billion. Disney and Comcast will also proportionally fund Hulu's recent acquisition of AT&T's 9.5% interest, and Comcast's future funding obligations are defined with dilution protections and an ownership floor.
Key Highlights
- 1Disney assumes immediate operational control of Hulu.
- 2A put/call arrangement allows Disney to acquire Comcast's 33% stake in Hulu as early as January 2024, or vice-versa.
- 3Hulu's fair market value for the Comcast stake transaction will be determined by independent experts.
- 4A minimum total equity value floor of $27.5 billion is set for Hulu in the context of the potential Comcast stake sale.
- 5Disney and Comcast will co-fund Hulu's acquisition of AT&T's 9.5% stake.
- 6Comcast's future funding of Hulu is subject to dilution if not met, with a 21% ownership floor.
- 7NBCUniversal content license with Hulu has been extended until late 2024.