Comcast Selling Its Stake In Hulu, What Happens Now?

Comcast Corp. is officially selling its 33% stake in Hulu to Walt Disney Co. but the price is still to be determined, reports the Philadelphia Business Journal.

The stake is worth at least $8.61 billion, according to original terms of the deal, but will go through an appraisal process in which Comcast CEO Brian Roberts has said the streaming service could be worth "way more."

Comcast and Disney agreed to a deal in 2019 in which Comcast can force Disney to buy its 33% stake in Hulu at current market value, or Disney could force Comcast to sell the stake. The option was set to trigger on Nov. 1 and Disney announced late Wednesday that Comcast has exercised its right to sell, giving Disney total ownership of Hulu after the transaction closes. The deal sets a ground floor value of the streaming service at $27.5 billion, but it will now go through an appraisal process to determine Hulu's true market value as of Sept. 30

According to a release from Disney, "the timing of the appraisal process is uncertain" but expected to be completed sometime in 2024. Negotiations on the deal were originally set to begin in January 2024, but the two sides moved the timeline up in September.

Disney will pay Comcast $8.61 billion by Dec. 1. That amount is less than 33% of the deal's $27.5 billion floor value because it factors in outstanding capital payments Comcast must make to Disney.

Both Comcast and Disney have retained independent companies to appraise the value of Hulu — Morgan Stanley and JPMorgan, respectively. If the two sides aren't within 10% of each other, a third party will enter the fray to settle the appraisal.

Hulu had about 48 million subscribers as of July. That compares to the 28 million that Comcast's NBCUniversal streaming service, Peacock, has after it added 4 million in the company's third quarter.

As Philadelphia-based Comcast steps away from Hulu, it's investing heavily into Peacock to gain ground in the streaming wars. Peacock subscribers jumped nearly 80% year over year in the third quarter and revenue from the platform grew 64%. Comcast officials pointed to Peacock's growing live sports offerings as a driver of growth, an area Hulu has leaned into in recent years as well.