Friday, May 26, 2023

Disney, Comcast Far Apart On Hulu Value

Disney’s chief executive officer Bob Iger has said his recent talks with Comcast CEO Brian L. Roberts over their shared streaming service, Hulu, have been congenial. However, the Wall Street Journal reported Thursday that was not always the case.

The years-long Hulu tug o’ war between the two companies includes a gigantic valuation gap, calculated — and secretive — maneuvering, and outright fury from both sides. Below are the seven juiciest (yes, corporate-buyout posturing can be juicy!) details from the report.

Unsurprisingly, Comcast, which is likely to sell its one-third ownership stake in Hulu to Disney in early 2024, has a much more generous valuation in mind than its would-be buyer, Disney. However, the chasm between their respective internal valuations is wider than many probably thought.

In 2021, NBCUniversal execs put Hulu’s value “at north of $70 billion,” per the WSJ’s sources. Disney’s own valuation of the service is “tens of billions of dollars” lower. In 2023, it’s unlikely that even Comcast/NBCU would peg Hulu’s valuation at $70 billion, but it wouldn’t hurt to try!

The years-ago agreement between the broadcasters values the streamer at a minimum of $27.5 billion — but that was based on Disney using Hulu as its international service, a person with knowledge of that original agreement told IndieWire. Based on that number, Comcast’s one-third is a bit north of $9 billion. But of course, that’s just the minimum agreed-upon value.

Should the two parties not be able to come to an agreement on valuation, “an independent third party will be enlisted to make a determination,” the Journal wrote. Comcast can force Disney to buy its share out in January.

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