Comcast moves up date for Hulu deal with Disney to Sept 30 By Reuters

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© Reuters. FILE PHOTO: The Comcast NBC logo is shown on a building in Los Angeles, California, U.S. June 13, 2018. REUTERS/Mike Blake/File Photo

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By Helen Coster and Samrhitha A

(Reuters) -Comcast has moved up the date for the sale or purchase of its remaining stake in Hulu to Disney to Sept. 30 this year, CEO Brian Roberts said on Wednesday.

“As of September 30, after some short period of time Disney can call, we can put, and I believe that’s what will end up happening,” Roberts said.

Shares of Comcast (NASDAQ:) extended gains and were trading 1.7% higher, defying weakness in the broader market. Roberts made the comments at the Goldman Sachs Communacopia + Technology Conference.

Disney owns two-thirds of Hulu, while Comcast owns the rest. Under a 2019 agreement, either company can trigger a sale or purchase of Comcast’s 33% stake to Disney as early as January 2024. The agreement ascribes a minimum equity value to Hulu of $27.5 billion.

Roberts said the companies will go through an appraisal process to determine the value of Hulu, and that process appraises “a lot more than Hulu,” in his opinion. Beyond valuing Hulu as a standalone business, Roberts said, he believes the benefit for a buyer in terms of reducing churn, as well as providing possible synergy with other services, could be worth $30 billion.

“The value of Hulu has increased dramatically,” said LightShed media analyst Rich Greenfield. “Hulu has far greater value than when they struck the $27 billion agreement with Disney … Comcast wants to get maximum value out of this.”

Hulu had 48.3 million subscribers at the end of the most recent quarter, compared with 24 million paid subscribers for Comcast’s Peacock streaming service and 105.7 million global subscribers for Disney+.

Greenfield applauded Disney CEO Bob Iger for agreeing to accelerate the Hulu purchase, saying that waiting until next year is hampering Disney’s strategic flexibility.

The veteran media analyst said Disney may fold the Hulu into the Disney+ streaming service, or perhaps sell it along with some of its traditional television assets, as Iger is contemplating.

“Whatever Disney chooses to do, having partial ownership of Hulu with Comcast makes anything else they want to do more challenging,” Greenfield said.



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