The tug of war is over on Hulu.
Walt Disney Co. said Wednesday it will take full control of Hulu, one of the world’s most popular streaming services, by paying at least $8.61 billion to buy Comcast, which owns a 33 percent stake. Comcast initiated the deal in 2019 as part of a “put-call” agreement between the companies. The final price will be determined by an evaluation process that will last over the next year.
Comcast, which recently stopped supplying Hulu with shows like “Saturday Night Live” and “The Voice,” moving them to its Peacock streaming service, said in September that it planned to sell Hulu to Disney. Negotiations have been intensified. Previously, Comcast and Disney had agreed that Comcast could force Disney to purchase its stake as early as next year (“put”). At the same time, Disney had the ability to require Comcast to sell (“call”) at that time.
“The acquisition of Comcast’s stake in Hulu at fair market value will advance Disney’s streaming objectives,” Disney said in a statement. Hulu, which has about 48 million subscribers, offers original shows like “Only Murders in the Building” and “The Kardashians” as well as programming from ABC, FX, Fox and other traditional networks.
Comcast said in a statement that it “looks forward to the valuation process,” which “we hope will reflect the exceptional value of the business.”
As part of an effort to make its flagship Disney+ streaming service profitable, Disney announced this year that Hulu’s content would be made available on Disney+ to subscribers of both services in the United States. (Hulu doesn’t work overseas, while Disney+ does.) Disney plans to launch this “one app experience” by the end of the year. Hulu will also continue as a stand-alone product, charging $18 for ad-free access and $8 for an ad-supported option.
Founded in 2007, Hulu was for many years the streaming equivalent of Frankenstein’s monster, an emerging start-up backed by 21st Century Fox, NBCUniversal, Disney and Time Warner. They hoped that shared ownership would make Hulu Switzerland’s streaming equivalent, a communal bulwark against the growing power of the Internet, but that proved to be a stumbling block. Disney gained control of Hulu after purchasing the entertainment assets of 21st Century Fox in 2019.
Like other big media companies, Disney is struggling to address investor concerns about streaming profitability and the decline of traditional television. Disney shares are trading at about $81, down from $197 two years ago.
In July, Disney announced it was exploring an unlikely sale of the stake in ESPN, which has driven much of Disney’s growth over the past two decades. Disney is also selling stakes in India and considering whether to spin off properties like ABC, the freeform cable channel and a string of local TV stations.
Benjamin Mullin Contributed to the reporting.