Disney Set to Purchase Full Ownership of Hulu for an Anticipated $8.6 Billion
Disney has announced its intention to buy out Comcast's one-third ownership in Hulu, projecting the transaction to be around $8.61 billion. Once the acquisition is finalized later this year, Disney will hold complete control of the streaming service.
Disney's brief statement regarding the deal emphasized its alignment with the company's broader streaming ambitions. This decision comes after prolonged discussions and speculations surrounding Hulu's ownership structure. Nevertheless, a valuation process to ascertain Hulu's exact worth will occur, anticipated to wrap up in 2024, before settling on the definitive purchase amount.
This endeavor to procure the remaining equity in Hulu started in 2019 when both Disney and Comcast valued the platform at a minimum of $27.5 billion. Bob Iger, Disney's CEO, has been vocal about his aim to acquire the entirety of Hulu. Earlier in March, he had mentioned Disney's meticulous examination of the platform's business dynamics.
This acquisition strategy coincides with significant transformations within Disney's media operations. Among the changes being considered are the potential sale of its ABC division and the pursuit of a "strategic partner" for ESPN. The overarching goal is to pivot from traditional TV broadcasting to a more digitally-oriented streaming model.
Originating in 2007, Hulu was a collaborative venture, owned by major media conglomerates, such as 21st Century Fox, Comcast, and Time Warner (CNN’s former parent organization). With the rise of streaming, these firms started concentrating on their individual streaming services. For instance, NBCU unveiled its streaming service, Peacock, in 2020 and began reallocating shows from Hulu to this new platform.
Nevertheless, Hulu has maintained its growth trajectory, boasting successful original productions like “The Handmaid’s Tale” and accumulating over 48 million subscribers. Meanwhile, despite increasing subscription fees, its popularity remains steady.
Furthermore, Disney has smartly integrated Hulu into its larger streaming service bundle, encompassing Disney+ and ESPN+, providing it at a reduced rate in this comprehensive package. Hulu's performance has been noteworthy within Disney's media conglomerate, especially as the company endeavors to attain profitability in the streaming sector and tap into a vast subscriber demographic attracted by its extensive entertainment catalog.
Iger, in a recent earnings call, elaborated on his vision for Hulu's growth, emphasizing the synergistic potential of combining Disney+'s content with general entertainment.
Disney is slated to unveil its quarterly financial results on November 8.