Entertainment Licensing

Disney to Take Full Control of Hulu

Following a put/call agreement reached with the Comcast Corporation, Disney will assume full operational control of Hulu, effective immediately.


Regarding NBCUniversal’s 33 percent stake, as early as January 2024, Comcast can require Disney to buy NBCUniversal’s interest and Disney can require NBCUniversal to sell that interest to Disney for its fair market value at that future time. Hulu’s fair market value will be assessed by independent experts but Disney has guaranteed a sale price for Comcast that represents a minimum total equity value at that time of $27.5 billion.


“Hulu represents the best of television, with its incredible array of award-winning original content, rich library of popular series and movies, and live TV offerings,” Disney’s CEO and Chairman Bob Iger said in a statement. “We are now able to completely integrate Hulu into our direct-to-consumer business and leverage the full power of The Walt Disney Company’s brands and creative engines to make the service even more compelling and a greater value for consumers.”


Disney and Comcast have agreed to fund Hulu’s recent purchase of AT&T Inc.’s 9.5 percent interest, pro rata to their current two thirds/one third ownership interests. Going forward, 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.


Whether Comcast funds its share of those equity capital calls or not, Disney has agreed that Comcast’s ownership interest will never be less than 21 percent such that Comcast is guaranteed to receive at least $5.8 billion under the put/call agreement.


In addition to the put/call agreement, Comcast has agreed to extend the Hulu license of NBCUniversal content and the Hulu Live carriage agreement for NBCUniversal channels until late 2024 and to distribute on its Xfinity X1 platform. NBCUniversal can terminate most of its content license agreements in three years’ time, and in one year’s time NBCUniversal will have the right to exhibit on its own OTT service certain content that it currently licenses exclusively to Hulu in return for reducing the license fee payable.