As the House of Mouse continues its aggressive campaign of digitizing and expanding its brand footprint, it seems they may want a clear resolution to the looming issue of Hulu’s split ownership earlier than the intended 2024 buy-out date. Brandon Blake, entertainment laywer with Blake & Wang P.A, reports on what we know.
Hulu’s Thorny Split
Despite something of a greater focus on building the reach of their Disney+ brand, Hulu has become something of a dark horse as well as a success story. Proving to have solid market traction, it’s a surprising little success story- and that success makes the awkward ⅓ stake owned by Comcast a problem Disney are going to have to focus on.
They are already, of course, bound to offer Comcast a buy out by the initial 2024 deadline. As CEO Bob Chapek points out, that’s not particularly far away, especially in entertainment industry terms. However, in real terms, Hulu is a Disney operated service. And, given its rising profile, they very likely want to see that happen officially.
The Fair Market Value Conundrum
The issue lies, however, in the terms of the original deal. Comcast must be offered ‘fair market value’ for the service, with a minimum total equity valuation of $27.5 billion. With Hulu proving to be both profitable and a key part of Disney’s wider services, they cannot easily fold it into their current bundling model without jettisoning Comcast’s stake.
Despite its profitability, it’s also not really a key focus for the company. Or Comcast, which favors Peacock. And when Disney takes the helm completely, how will the adult-leaning Comcast demographics fit into the wider vision for Disney+. Is there a benefit to them keeping two successful streaming services under one banner?
With these questions unresolved and no clear path forward, Hulu seems set to remain a juicy, but thorny, issue for both companies. There can be little surprise that Disney would be interested in resolving the matter quickly- but for now, we can only wait and see.
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