Disney takes control of Hulu, will buy Comcast's stake in 2024

CREDIT Courtesy of Hulu

Disney and Comcast announced a deal under which Disney will assume full operational control of Hulu, effective immediately. This time around, it may end up fully owning video streaming platform Hulu - and with a new agreement signed today with Comcast, it may be able to do so as early as 2024 at a cost of at least $27.5 billion. Hulu will be Disney's third streaming service, with the list including Disney+ and ESPN+.

Hulu will be a key weapon in Disney's growing online fight with Netflix Inc., and the deal gives the service access to programming from Comcast's NBCUniversal division for at least three more years.

Now, nothing is changing for NBCUniversal content (which is owned by Comcast) right away. Under the terms, Comcast is guaranteed a $5.8 billion windfall by early 2024, when the cable giant can sell its stake to Disney.

Disney is preparing to launch its own streaming service called Disney+ on November 12.

What happens in 2024 will be the real kicker for Hulu (and Disney). Similarly, Disney can require NBCUniversal to sell its Hulu stake at the time. It's a free service and therefore will rely on ad-supported content to generate a profit.

In addition to that Marvel content, Hulu is development TV series based on Sweet Tooth, Motor Girl, Old City Blues, and Woke. Its newly formed WarnerMedia arm is also set to launch its own SVoD offering in the coming months.

An aftereffect of all these new services could be the fragmentation of content. Well, Disney+ is being billed as a family friendly streaming service in line with Disney's theatrical output, but just as Disney would never greenlight and release a movie like Prometheus, they're not exactly itching to put American Horror Story on Disney+. Landgraf said he used to wish FX was its own stand-alone premium service.

"The move enables an worldwide launch for the service". In a year, its streaming service can also start offering video that's now exclusive on Hulu, sharing the shows with Hulu for the time being.

Comcast will have the option but not the obligation to fund its proportionate share of Hulu's future capital calls and will be diluted if it elects not to fund. Disney has agreed that only $1.5 billion of any year's capital calls can be funded through further equity investments with any capital in excess of that annual amount being funded by non-diluting debt.



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