A new report from The Wall Street Journal digs into Disney and Comcast's fight over Hulu, including word that the two companies are very far apart on a valuation.
- According to WSJ, last year, top executives from Disney visited the New York law office to give disposition in the fight over the streaming service.
- Comcast claimed that Disney, which is the majority owner, hurt Hulu by failing to launch outside of the United States.
- The arbitration case, which they haven’t discussed publicly, is part of the larger battle between Disney and Comcast. It has featured claims of legal threats from broken promises.
- Now the company is having to deal with the baggage to strike a deal that would lead to Comcast exiting the business.
- Under the agreement, Comcast can require Disney, which owns two-thirds of Hulu, to buy its one-third stake, or Disney can require Comcast to sell starting in 2024.
- Both sides want to do the deal, but each of them has assessed Hulu's value over the past few years differently.
- Those who are familiar with the situation have said they have been tens of billions of dollars apart.
- Under the agreement, Hulu can be valued at no lower than $27.5 billion — although there’s no language on what the top price could be.
- WSJ notes that the companies will do an assessment of Hulu's value again in early 2024, and if they are still far apart, an independent third party will make a determination.
What they’ve been saying:
- This month, Disney’s CEO, Bob Iger, said during an earnings call that the company has had "cordial discussions and signaled his desire to give consumers a single streaming offering that includes Hulu content." He stated, "How that ultimately unfolds is, to some extent, in the hands of Comcast."
- Comcast CEO Brian Roberts told investors at a conference days later that the "majority case" is that Disney will buy Comcast's stake. "Hulu’s value, he said, should be based on the hypothetical idea that it would be put up for sale in an auction for anyone–including any major media or tech company–to buy it." He stated, "The job is to then give us one-third of that value. So I think we have a very valuable position."