Disney To Operate Hulu

Continuing the massive restructuring of the entertainment industry, Comcast Corp. has agreed to unload its one-third stake in streaming service Hulu for a minimum of $5.8 billion and up to $9.2 billion in 2024 to the Walt Disney Co., the two companies said on Tuesday.

According to philly.com, the complex deal ends speculation over how Comcast and Disney -- which have waged takeover battles for Fox’s Hollywood entertainment studio and European pay-TV operator Sky -- would jointly operate Hulu.

Hulu is a great prize because of the 28 million subscribers it has for its on-demand movie and tv shows. The California-based service also gives viewers instant access to current shows from every major U.S. broadcast network and to libraries of hit TV series and films.

Disney CEO Bob Iger said in a statement: "We are now able to completely integrate Hulu into our direct-to-consumer business and leverage the full power of [Disney’s] brands and creative engines to make the service even more compelling and a greater value for consumers.”

NBCUniversal executives Jeff Shell, Matthew Bond and Linda Yaccarino will step off the Hulu board as part of the deal, relinquishing management oversight. Comcast also has agreed to license Comcast-owned NBCUniversal shows and content to Hulu, though NBCUniversal could take those shows off Hulu to stream on its own service.

The NBCUniversal streaming service is expected to launch in 2020.

Under the financial terms disclosed on Tuesday, the deal guarantees Comcast $5.8 billion for its Hulu stake if it sells the stake before January 2024. Comcast says it has invested $2 billion into Hulu and compares the investment to one it made years ago into shopping channel QVC, now part of Qurate in West Chester.

In January 2024, Disney can exercise an option to buy Comcast’s 33 percent stake in Hulu. At that time, Disney has guaranteed a minimum value for Hulu of $27.5 billion -- which values Comcast’s stake at $9.2 billion.