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Disney takes full control of Hulu as Comcast steps aside

14 May 2019

Disney and Comcast will enter a "put/call" agreement regarding NBC's 33% ownership interest in Hulu. Meanwhile, Disney continues its quest for worldwide domination. Now, The Walt Disney Company and Comcast Corporation have announced that Disney will assume full operational control of Hulu, effective immediately, in return for Disney and Comcast entering into a "put/call" agreement regarding NBCUniversal's 33% ownership interest in Hulu.

Fair market value will be assessed at the time of sale, but Disney has guaranteed Comcast a minimum sale price of $27.5 billion for the remaining stake in Hulu. NBCU is planning to launch a free, ad-supported streaming service next year. In addition to having plenty of more adult-leaning content, Disney has already expressed an interest in selling "bundles" that give users access to Disney+, Hulu, and ESPN+ for a discounted rate, so Hulu will live on.

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Comcast will have the option but not the obligation to fund its proportionate share of Hulu's future capital calls and will be diluted if it elects not to fund. Disney has agreed that only $1.5 billion of any year's capital calls can be funded through further equity investments with any capital in excess of that annual amount being funded by non-diluting debt. That has given Comcast a big stake in how the streaming platform is operated, including how NBCUniversal shows like 30 Rock and Seinfeld are licensed. And that's not to mention all the R-rated Fox films that can be put on Hulu instead of Disney+.

In a sign of things likely to come, NBCU chairman of advertising and client partnerships Linda Yaccarino said on Monday that "the shows that viewers steam the most are coming home" in relation to NBCUniversal's upcoming streaming service, which means when the licensing deals for shows like Friends and The Office expire with Netflix, NBCUniversal will likely be pulling them and putting them exclusively on their own streaming service.

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Disney CEO Bob Iger said in a media call Tuesday that the deal gives the company the ability to bundle its streaming services easily, meaning consumers can buy one, two or all three of its platforms. NBCUniversal will have the option to offer some of the shows it now licenses exclusively to Hulu in one year's time.

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Disney takes full control of Hulu as Comcast steps aside