Disney has agreed a deal with Comcast that will see it assume “full operational control” over Hulu, effective immediately.
Under the agreement, Comcast can make Disney buy its 33% stake in Hulu from January 2024. Disney can also compel Comcast sell the stake for its fair market value at that time.
Hulu’s fair market value will be assessed by independent experts but Disney has guaranteed a minimum sale price for Comcast of US$27.5 billion.
At the same time, Comcast has agreed to continue licensing NBCUniversal content and live NBCUniversal channels to Hulu until late 2024, and to distribute Hulu on its Xfinity X1 platform.
“NBCUniversal can terminate most of its content license agreements with Hulu in three years’ time, and in one year’s time NBCUniversal will have the right to exhibit on its own OTT service certain content that it currently licenses exclusively to Hulu in return for reducing the license fee payable by Hulu,” said the companies in statement.
The news comes after Hulu agreed to buy back US telco AT&T’s 9.5% minority stake in the streaming video joint venture for US$1.43 billion in April. In today’s statement, Disney and Comcast clarified that they will fund this purchase pro rata to their current two thirds to one third ownership interests.
“Going forward, Comcast will have the option but not the obligation to fund its proportionate share of Hulu’s future capital calls and will be diluted if it elects not to fund,” said the companies.
“Disney has agreed that only US$1.5 billion of any year’s capital calls can be funded through further equity investments with any capital in excess of that annual amount being funded by non-diluting debt.
“Whether Comcast funds its share of those equity capital calls or not, Disney has agreed that Comcast’s ownership interest in Hulu will never be less than 21% such that Comcast is guaranteed to receive at least US$5.8 billion under the put/call agreement.”
Hulu announced earlier this month that its customer base now stands at 28 million – 26.8 million monthly paid subscribers and 1.3 million promotional accounts. At the same time it unveiled new series orders and details of a new ad offering.
NBCUniversal plans to launch its own streaming service in 2020.
