Published: Tue, May 14, 2019
Entertaiment | By Paul Elliott

Disney Hulu Ownership Complete After Deal With Comcast

Disney Hulu Ownership Complete After Deal With Comcast

Comcast Corp has agreed to give Walt Disney Co full control of Hulu in a deal that puts a minimum future value on the streaming service of $27.5 billion while laying the groundwork for the creation of a powerful competitor for Netflix Inc. Indeed, just recently the Disney+ adaptation of High Fidelity moved from Disney+ to Hulu, realizing the Zoe Kravitz-led series would be a better fit on Hulu, and FX chief John Landgraf said during today's upfront presentation that he doesn't think FX shows belong on Disney+ at all.

By establishing an expiration date of five years from now, Comcast is betting the value of its stake will appreciate significantly as Disney prepares unencumbered to expand the scope and reach of Hulu in the domestic and global markets to battle the likes of Netflix, Inc and Apple Inc.

Disney is now the only one with its hands on Hulu's steering wheel. Within five years, Comcast has agreed to sell its Hulu stake to Disney for at least $9.2 billion.

The agreement, which ascribes a minimum equity value of Hulu at $27.5 billion, allows either company to trigger a sale or purchase of Comcast's 33% stake to Disney as early as January 2024.

Disney is preparing to launch its own streaming service called Disney+ on November 12. Last month, Disney detailed its plans for Disney Plus, which is meant to be Disney's family-friend companion service to its offering of Hulu as the home for more adult-oriented fare. Now the company, known as WarnerMedia, is launching its own streaming service this year, which will focus on HBO and other shows and movies owned by the company. Many of those are licensed to Hulu from NBCUniversal.

Comcast, as part of the deal announced Tuesday, will extend the Hulu license of NBCUniversal content and the Hulu Live carriage agreement for NBCUniversal channels until late 2024.

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