Disney now owns all of Hulu.
The media and entertainment conglomerate has agreed to pay an extra $439 million to Comcast, according to a securities filing Monday. The additional payment gives Disney full control of the streaming service and ends more than a year of back-and-forth with Comcast.
Disney had already paid $8.6 billion for Comcasts 33% stake, but the latter argued that its owed another $5 billion. A third-party appraiser was brought in to try and settle the dispute.
The deal is expected to close by July 24 and the additional expense will not affect Disneys previous guidance for growth this year, the filing adds.
Shares in both Walt Disney Co and Comcast Corp rose just over 1% during the first hour of trading on Tuesday.
We are pleased this is finally resolved, Disney CEO Bob Iger said in the filing. We have had a productive partnership with NBCUniversal, and we wish them the best of luck.
Completing the Hulu acquisition paves the way for a deeper and more seamless integration of Hulus general entertainment content with Disney+ and, soon, with ESPNs direct-to-consumer product, providing an unrivaled value proposition for consumers, he added.
Hulu is one of the oldest streaming services, first launching in 2008. It began as a joint venture between Disney, Comcast and Time Warner. With more than 55 million subscribers as of the first quarter of this year, Hulu remains profitable. The platform offers original shows, such as Only Murders in the Building, as well as offering hit shows from Disneys traditional television networks, like ABC and FX. Winning titles include Greys Anatomy, Modern Family and Its Always Sunny in Philadelphia.
Disney last year began allowing subscribers of both Disney+ and Hulu to stream both services through the Disney+ interface. The aim was to increase engagement on Disney+ and reduce subscriber churn rates.
Finalizing the deal leaves Peacock as Comcasts primary streaming service. However, since launching in 2020, its yet to report profitability as a standalone steaming platform. In an attempt to boost advertising sales and subscriptions, Comcast has been growing its sports content.
Sports continues to be a huge driver, with the NFL, Nascar, golf, Premier League, the World Cup on Telemundo including the Womens World Cup going on right now Big Ten starting this fall, and the Paris Olympics coming up next year, Comcast President Mike Cavanagh said during an investor call in 2023.
That strategy appears to be turning Peacocks fortunes around. Its losses fell to $215 million in the first quarter, down from $639 million a year ago. Overall revenues rose 16% to $1.2 billion and its subscriber count has almost doubled since 2020, hitting 41 million this year. Yet, by comparison, thats still just 13% of Netflixs eye-watering 310 million.
