The Walt Disney Company and Comcast Corporation entering into a “put/call” agreement regarding NBCUniversal’s 33 percent ownership interest in Hulu, inorder to allow Disney to take full operational control of Hulu with immediate effective.
As per the put/call agreement, as early as January 2024, Comcast can require Disney to buy NBCUniversal’s interest in Hulu and Disney can require NBCUniversal to sell that interest to Disney for its fair market value at that future time. The company could either sell it at a valuation $27.5 billion or whatever the value Hulu is appraised to be worth in five years.
Comcast and Disney also agreed to fund Hulu’s recent purchase of AT&T Inc.’s 9.5 percent interest in Hulu. 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 assured Comcast’s ownership interest in Hulu 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 Hulu on its Xfinity X1 platform. NBCUniversal can terminate most of its content license agreements with Hulu in three years’ time, and in one year’s time NBCUniversal will have the right to show on its own OTT service select content that it currently licenses exclusively to Hulu in return for reducing the license fee payable by Hulu.
Robert A. Iger, chairman and CEO of The Walt Disney Company, said: “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.
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.”