Published: Tue, May 14, 2019
Life&Culture | By Sue Mclaughlin

Disney takes control of Hulu before own streaming launch

Disney takes control of Hulu before own streaming launch

Disney and Comcast have entered something called a "put/call" agreement, through which Comcast can require Disney to buy NBCUniversal's interest in Hulu while Disney can require NBCUniversal to sell that interest to Disney.

In April, AT&T/Warner Media reached a deal to sell its 10% stake in Hulu back to the streaming company. Read about the Disney Hulu ownership deal below.

Bow to your new corporate overlord, because Disney now owns Hulu.

Disney and Comcast also said they had agreed to fund Hulu's recent buyout of AT&T's 9.5% interest in the company. After completing its acquisition of 20th Century Fox earlier this year, the Mouse House has now assumed full operational control of the streaming service Hulu, effective immediately.

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The Hulu deal also comes as Disney is embarking on an ambitious streaming initiative. "Postponing the closing five years (later) allows Disney to not take on more debt after just closing (its purchase of) Fox, while giving Comcast an option to the upside if/when the Hulu valuation grows during this time". That will mean that Comcast can require Disney to buy out NBCUniversal's interest in Hulu for its fair market value. Hulu's fair market value will be assessed at the time of that future sale, but Disney guaranteed a minimum sale price of $27.5 billion.

Last month, Hulu said it had bought back wireless carrier AT&T Inc's stake in the USA entertainment streaming service for $1.43 billion, in a deal that valued Hulu at $15 billion. But the real kicker comes in 2022, when NBCUniversal has the right to cancel most of its content-licensing agreements with Hulu, which means shows like Parks and Recreation could be departing to head to NBCUniversal's own streaming service. The stuff that isn't appropriate for Disney+ can live on Hulu. After all, a significant part of Hulu's appeal to subscribers is the variety of shows they can access on the service.

Disney may bundle Hulu with its upcoming kids-focused streaming service, Disney Plus, and its sports service, ESPN Plus, executives said last week.

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