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Disney Takes Control Of Hulu

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Disney Takes Control Of Hulu

Streaming video platform Hulu will be fully controlled by Walt Disney Co (NYSE: DIS) as part of an agreement reached with Comcast Corporation (NASDAQ: CMCSA) that the companies announced Tuesday. 

What Happened

Disney and Comcast reached an agreement Tuesday in which Comcast will sell its stake in Hulu to Disney for at least $5.8 billion as soon as five years from now. Comcast owns a 33-percent stake in Hulu, and the price tag on the sale of its stake in 2024 or later could rise if the streaming video company's valuation increases based on the analysis of independent experts.

Comcast agreed to hand over its operational control immediately, giving Disney "full operational control" of Hulu.

Why It's Important

Disney CEO Bob Iger said in a statement that the Mouse will now be able to "completely integrate" Hulu into its own streaming video business and "leverage the full power" of Disney's family of brands.

Doing so will create a service that is "even more compelling and a greater value for consumers," he said. 

What's Next

Some of the exclusive content made by NBCUniversal for use on Hulu could be made available on Comcast's streaming platform in 2020 in exchange for a reduced license fee from Hulu. NBCUniversal also holds the right to end most of its content license agreements with Hulu in 2022.

Disney shares were trading up by 1.73 percent at the time of publication Tuesday, while Comcast shares were higher by 1.8 percent. 

Related Links:

Report: Comcast Might Sell Hulu Stake To Disney

Morgan Stanley Dissects AT&T's Sale Of Hulu Stake

Photo courtesy of Hulu.

Posted-In: Bob Iger Hulu streaming videoNews Contracts Best of Benzinga

 

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