Disney is now in full control of Hulu, an entertainment streaming service that not only provides access to network and studio shows and films but also original programming.
The move comes after Disney successfully acquired 20th Century Fox, who had a large stake in the streaming service. Disney announced the deal earlier this morning. More on the report below.
According to the press release put out this morning on Disney’s corporate website, Disney and Comcast are entering into a “put/call” agreement regarding NBCUniversal’s 33% ownership interest in Hulu. Under the put/call agreement, as early as January 2024 Comcast can require Disney to buy NBCUniversal’s interest in Hulu and Disney can require NBCUniversal to sell that interest to Disney for its fair market value at that future time.
While NBCUniversal will continue to allow Hulu to stream their contract up until 2024, they can pull back their content previously contracted to Hulu. Furthermore, they can cancel most of its content licensing agreements with Hulu by 2022. It should be noted that NBCUniversal also has plans to launch its own streaming service.
Walt Disney Company Chairman and Chief Executive Officer Bob Iger had this to say in a statement:
“Hulu represents the best of television, with its incredible array of award-winning original content, rich library of popular series and movies, and live TV offerings. We are now able to completely integrate Hulu into our direct-to-consumer business and leverage the full power of The Walt Disney Company’s brands and creative engines to make the service even more compelling and a greater value for consumers.”
Now that Disney is in full control, they can take Hulu in a new direction, which may include launching the service internationally according to Variety.
Disney and Comcast have agreed to fund Hulu’s recent purchase of AT&T Inc.’s 9.5% interest in Hulu. Additionally, 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 $5.8 billion under the put/call agreement.
If Comcast chooses not to fund its proportionate share of Hulu’s future capital calls, their shares will be diluted.
Variety adds that Hulu will be “a key pillar” in Disney’s direct-to-consumer plans, where it will serve as a more adult-oriented streaming service when compared to Disney+, which will be geared towards delivering family friendly content. Disney has ESPN+, a sports-oriented streaming service, as well.
Disney also says that these three streaming services will eventually be bundled together.
[Source: The Walt Disney Company | Variety]