Disney announced that its financial partner JP Morgan Chase has determined that the current market value of Comcast’s one-third share of Hulu is $8.61 million. Valuing Comcast’s shares is an important step in the process by which Disney will likely acquire Comcast’s shares to become the sole owner of the streaming platform.
Hulu was founded in 2007 as a joint venture between Disney, Comcast, and Twentieth Century Fox, with each company holding equal shares in the company. After purchasing Twentieth Century Fox in 2019, Disney’s ownership grew to two-thirds of the company.
At that time, Comcast decided not to sell its shares in Hulu because it believed that the value of the company would rise over time. Instead, the two companies agreed that Disney would have the right to purchase Comcast’s shares effective January 1st, 2024. In early September, the companies agreed to begin the process by valuing Comcast’s shares in the current market.
Disney’s valuation sets the “floor” of the amount Comcast will receive. Comcast will now work with Morgan Stanley to determine its own valuation of Hulu. If the two values fall within 10% of each other, the purchase price will be set at the average of the two amounts. If the difference in valuations is greater than 10%, then a third valuation from an independent appraiser will be sought.
While Disney is said to have the financial wherewithal to complete this acquisition, the timing is awkward for the House of Mouse. Disney is suffering massive losses from its streaming, television, and theatrical businesses, and the multi-billion-dollar price tag for Comcast’s Hulu shares will represent another financial strain.
But the price may be worth it since Disney CEO Bob Iger considers Hulu to be a key asset in his company’s streaming future. It has developed popular series such as THE BEAR and ONLY MURDERS IN THE BUILDING, which appeal to an adult audience in a way that content on Disney+ does not.