September 14, 2022
Hulu has become a hot commodity. The subscription streaming video pioneer is majority owned (67%) by Disney, with Comcast’s NBCUniversal owning the other 33%. The platform has nearly 50 million subscribers when combining the SVOD service with the online TV offering.
In 2024, Comcast has the right to sell its remaining stake to Disney for at least $27.5 billion. Disney CEO Bob Chapek would like to move up the sale window at a lower price (of course) to expedite melding Hulu within the Disney+ ecosystem.
But Comcast CEO Brian Roberts may have other ideas.
Speaking Sept. 14 at the Goldman Sachs + Technology confab in San Francisco, Roberts was asked about the pending sales date — a move that would seem in the cards considering NBCUniversal’s recent decision to begin pulling original content from Hulu to put on its own proprietary Peacock streaming service.
Roberts, however, recognizes a valuable asset in Hulu, and believes selling NBCUniversal’s stake could instead transform into an offer to buy Hulu outright.
“Hulu is a phenomenal business,” Roberts said. “Its scale is fantastic.”
The CEO said he believes Hulu’s content offering combined with brand value make the platform a prized commodity in an ecosystem that has gone all in on the streaming window. In addition, despite Roberts’ words of encouragement, the Peacock streaming service has failed to resonate with consumers. Less than 15 million people pay for the platform, which is offered free to Xfinity subscribers.
“I believe if Hulu was put up for sale, Comcast would be interested [in buying it],” Roberts said. “So would a lot of other tech and media companies. You would have a robust auction.”
Indeed, there never has been a bidding process for an established streaming player like Hulu, and such a process, Roberts contends, should not take place in private, rather than public markets.
Under the companies’ agreement, Disney has the right to acquire NBCUniversal’s stake, and Comcast has the right to a put, or the option, but not the obligation, to sell a specific asset at a predetermined price until a certain date.
“Of course, we are always happy to talk about it, and the value we structured into the [original operational control] agreement [with Disney] anticipates that a ‘robust’ auction for 100% of the company as a going concern and what would somebody pay for that, a third of the company’s equity value,” Roberts said.
In other words, Roberts contends Hulu represents “tremendous value,” a sentiment he believes Comcast shareholders are on board with. Whether the streaming platform and online TV service are put up for sale is Disney’s decision.
“Regardless, 100% value of Hulu is what we are entitled to,” Roberts said. “But if it were up for sale, we certainly, and I think others would want to get into that opportunity. I think our position [in Hulu] is very enviable for us and our shareholders. As a company, Hulu has done a spectacular job.”