The other perks of the deal for Comcast NBCUniversal include both the ability to cancel content-licensing deals with Hulu by 2022, but more importantly, any Hulu-exclusive deals can be canceled within one year.
As early as January 2024, Comcast can require Disney to buy its interest in Hulu, and Disney can require NBCUniversal to sell that interest to Disney for its fair market value at that time.
For Disney, Comcast has agreed to distribute Hulu on its Xfinity X1 platform, and has extended the Hulu Live carriage agreements for NBCUniversal channels for an unspecified duration. Hulu's value will be assessed by independent experts, Deadline explains, although Comcast will get a minimum of $27.5 billion out of the deal.
The two companies have now announced a deal for Disney to assume full operational control of Hulu, effective immediately.
At least for Hulu, NBCUniversal has agreed to keep its shows and networks on there until late 2024.
As part of the accord, NBC negotiated the rights to show nearly everything it now licenses exclusively to Hulu on its own upcoming streaming service, which debuts next year, meaning the services will share those programs. NBCU is planning to launch a free, ad-supported streaming service next year.
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The transaction, leaving Hulu run by just one media company for the first time, marks the end of one of the most complicated ownership sagas in the entertainment business.
"Hulu is the third leg of Disney's streaming strategy", said Trip Miller, a Disney shareholder and managing partner at Gullane Capital Partners. But once the entire stake is owned by Disney, that will give the House of Mouse an overall 93% controlling stake in the streaming service. But, during Disney's Investor Day briefing of Disney+ and its post-Fox plans, Kevin Mayer, chairman of the direct-to-consumer division, said the company is "likely" the company will be bundling together Hulu, ESPN+, and Disney+ for "a discounted price". AT&T is working on its own service.
The Hulu deal also comes as Disney is embarking on an ambitious streaming initiative. Disney has forecast that Hulu will turn a profit around then. Netflix now has a market capitalization of $152 billion, 10 times Hulu's most recent valuation. Hulu has almost 27 million paid subscribers.
"As Disney continues to grow their subscriber base, retaining Comcast/NBC Universal content is important", Miller said.
AT&T's sale valued the unprofitable Hulu at $15 billion.