In a significant move consolidating its streaming dominance, The Walt Disney Company has unveiled plans to purchase the remaining 33% stake in Hulu, LLC, which is currently owned by Comcast Corp.’s NBC Universal.
This announcement comes on the heels of Comcast’s decision on November 1 to invoke its right under the existing put/call agreement between the two entertainment giants. The strategic acquisition serves to intensify Disney’s ambitions in the streaming landscape.
As stipulated by the terms of their agreement, Disney will be parting with an estimated $8.61 billion by December 1 to secure NBCU’s share.
This figure is grounded on NBCU’s proportion of Hulu’s $27.5 billion guaranteed floor value, which was previously established when the two corporations inked their deal in 2019. This sum will also account for the expected outstanding capital call contributions that NBCU owes to Disney.
A vital clause in the agreement dictates that by September 30, 2023, an appraisal process will be in place to evaluate Hulu’s equity fair value. If this assessment exceeds the set floor value, Disney has committed to compensating NBCU for the difference, aligning with their respective stake percentages.
Even though the exact timeline for this appraisal remains a tad ambiguous, industry insiders forecast its completion by the end of 2024.
Disney’s acquisition underscores the rapidly changing dynamics of the streaming industry. By consolidating their stake in Hulu, Disney not only fortifies its presence but also sends a clear message about its commitment to leading the streaming era.