Disney faces $27.5 billion forced buyout to Comcast for Hulu

[Jwaire]

From CNBC,

"[Comcast CEO] Roberts and then-Disney CEO Bob Iger struck a deal to temporarily save Disney billions after splurging on Fox while taking operational control of Hulu. Comcast agreed to hold its stake in Hulu until January 2024. Then, Comcast can force Disney to buy its 33% of Hulu at a minimum total valuation of $27.5 billion. The price tag could be higher depending on fair market value of Hulu in 2024 as determined by an independent third party.

....

At the time, Disney+ was being built. It would launch eight months later, in November 2019. Hulu seemed like a highly strategic asset as millions of Americans canceled cable TV in favor of free and subscription streaming services.

Fast forward three years, and the raison d’etre and future of Hulu is unclear to investors, analysts, media executives and even Disney employees. Disney+ has become Disney’s flagship subscription streaming offering, with 138 million global subscribers as of April 2. Hulu is U.S.-only, with just over 41 million subscribers.

Disney is on the hook to pay billions of dollars for an asset that now seems like an awkward fit. There’s little evidence investors care about Hulu’s quarterly results. In fact, the better Hulu performs, the more Disney will have to pay Comcast to buy the rest of it in 2024."


https://www.cnbc.com/2022/07/06/hul...is-as-disney-decides-how-to-move-forward.html


There's no defense of Chapek. However, Iger left him with an absolute mess. We won't be seeing any relief from cost cutting/revenue generating measures at the parks for quite some time.

 

[Goofed98]

Now, I went to a state school, but I think you have to sell a LOT of $5000 cocktails to cover $27.5B.

 

[Jwaire]

Now, I went to a state school, but I think you have to sell a LOT of $5000 cocktails to cover $27.5B.

For a streaming service you no longer need or want too. And no one else wants either.

 

[butterscotchcollins]

I disagree that Hulu doesn’t have a place in streaming. With few exceptions it’s the only consolidated place to see Network and Cable shows next-day. Think of the popular properties like Bob’s Burgers and The Bachelor, even SNL - am I wrong and (besides the internet) they’re available next-day on another streaming service?

 

[BrianL]

What I don't understand is why the push to put more adult content on D+ when it could have had a home on Hulu? It makes Hulu less relevant, when they should be trying to make it more attractive to people to bundle. All those old Fox movies could easily have ended up there. It feels like they don't know what they want Hulu to even be.

 

[bryaalre]

Hulu does have a great niche in that episodes are available the next day. The problem is that since only Disney will own it, you will no longer get things like SNL, Law and Order and all other NBC shows as they will be on Peacock next day. At $9B, its an expensive price to pay to own the rest of Hulu, even though Hulu does actually make a profit.

The big question is what is Disney's strategy with Hulu? Do they merge it into Disney+ and add a Hulu hub or do they keep it separate. They could look to sell Hulu but I don't know what buyers there would be since Disney would take all of its content off it once they were able to. I would think that keeping it separate would be for the best as Hulu is an established brand and it's not like there is any confusion over what Hulu is especially when compared to Disney+. Hulu and Disney+ are competitors but don't necessarily cannibalize each others subscribers.

 

[HopperFan]

We have hulu and don't watch it. Disney ... "let it go".

 

[BrianL]

We have hulu and don't watch it. Disney ... "let it go".

There's a couple of things that I do want to watch on it, but not enough to warrant it. I may add it to my D+ as a bundle once my 3 years expires, at the very least to watch The Orville and new Futurama. I can't see it becomming a staple for me though.

 

[HopperFan]

There's a couple of things that I do want to watch on it, but not enough to warrant it. I may add it to my D+ as a bundle once my 3 years expires, at the very least to watch The Orville and new Futurama. I can't see it becomming a staple for me though.

Yup, the only reason we are considering to keep is when I renew my D+ in November. We also have ESPN which we want to keep so might as well do bundle. But you are right there isn't enough for it to be a must have. We cut cable cord and trying to keep streams to most watched.

Do you think Disney has allowed it to become less attractive is because they knew what it would cost and perhaps going to let it go?

 

[BrianL]

Yup, the only reason we are considering to keep is when I renew my D+ in November. We also have ESPN which we want to keep so might as well do bundle. But you are right there isn't enough for it to be a must have. We cut cable cord and trying to keep streams to most watched.

Do you think Disney has allowed it to become less attractive is because they knew what it would cost and perhaps going to let it go?

I don't know. They will have to pay for it anyway, but maybe when they take full ownership they will do something big with it.

 

[Moliphino]

There's a couple of things that I do want to watch on it, but not enough to warrant it. I may add it to my D+ as a bundle once my 3 years expires, at the very least to watch The Orville and new Futurama. I can't see it becomming a staple for me though.

Around Black Friday for the past few years, Hulu has been giving really good deals for like $1-2/month for a year. It's the tier with ads, but it doesn't bother me much for that cheap.

 

[lockets]

Around Black Friday for the past few years, Hulu has been giving really good deals for like $1-2/month for a year. It's the tier with ads, but it doesn't bother me much for that cheap.

There are some shows I love on there but I stopped watching Hulu cause I can’t deal with watching the same ads over and over again. Felt like I was getting brainwashed! Like literally there was an ad for a piece of medical equipment that I would never use and they played the ad over 100 times for me during the year. That’s just one example. I guess it’s their way to annoy people into an upgrade?!

 

[Dis Dragon]

I use Hulu all the time, has the full library of Cheers, MASH, and Golden Girls... Well except the "risque" episodes.

 

[zebrastreyepz]

I just went back to Hulu for Castle, Golden Girls, Designing Women, and some others.

 

[Jwaire]

Hulu currently has existing agreements with many networks and production studios. However, as those agreements expire (I see little chance Comcast renews their agreement once they aren't owners. It's quite possible CBS won't either.), Hulu becomes worth less and less.

At some point, it just makes sense to fold it into Disney+ (like how the Starz service works in the UK). But yet Disney is still going to be forced to shell out billions in January to buy it.

 

[DodgerGirl]

When you look at the general picture it seems that in TV streaming services Hulu has remained number two next to Netflix Disney+ Peacock and Apple TV and what I think Hulu is trying to do is become king of streaming services and when this buyout occurs I think it will get Disney+ more subscribers and Hulu will merge into one streaming network with Disney+. For one thing the one thing that keeps Hulu surviving is their original programming and almost the entire ABC lineup with shows such as Press Your Luck Celebrity Family Feud Dancing With The Stars The Bachelor/Bachelorette and ABC's sitcoms and this has certainly paid off because you can see the ABC show episode directly on Hulu the next day. Mom got lucky last year when she got a whole year of Hulu for really cheap and she plans to continue our Hulu membership when the current one expires in November and I like Hulu because I get to see my game shows on there. I think if this buyout goes well you can they will also take the Hulu original movies and series to Disney+ and add some sports from ESPN as well

 

[AvidDisReader]

Hulu currently has existing agreements with many networks and production studios. However, as those agreements expire (I see little chance Comcast renews their agreement once they aren't owners. It's quite possible CBS won't either.), Hulu becomes worth less and less.

At some point, it just makes sense to fold it into Disney+ (like how the Starz service works in the UK). But yet Disney is still going to be forced to shell out billions in January to buy it.

Exactly this. This is the same reason that Netflix will continue to struggle as much of its most popular shows are from studios that will want their content back when the agreements expire. Now we get to see how good of a business man Chapek really is. Could Disney be purposely holding back content to HULU to make it seem financially not worth it. So he could use this as leverage to bring the price down considerably. If however, Disney ends up forking over the 27+ billion, then to me it would be the final stake that Chapek is just over his head.

 

[ktlm]

We use Hulu WAY more than any of our other streaming services.

 

[Jrb1979]

Exactly this. This is the same reason that Netflix will continue to struggle as much of its most popular shows are from studios that will want their content back when the agreements expire. Now we get to see how good of a business man Chapek really is. Could Disney be purposely holding back content to HULU to make it seem financially not worth it. So he could use this as leverage to bring the price down considerably. If however, Disney ends up forking over the 27+ billion, then to me it would be the final stake that Chapek is just over his head.

Again it's great Chapek is doing well with this side of the company. The parks side has been a disaster. I guess that's ok since that's not focus now.

 

[JBRB828]

Around Black Friday for the past few years, Hulu has been giving really good deals for like $1-2/month for a year. It's the tier with ads, but it doesn't bother me much for that cheap.

Yup, I got it for .99 for the year. I don’t watch it much, I have Comcast cable to watch most regular TV.