Disney CEO Bob Iger said his recent talks with Comcast CEO Brian L. Roberts about their shared streaming service, Hulu, were congenial. However, Wall Street magazine he reported Thursday that wasn’t always the case.
Hulu’s long-running tug-of-war between the two companies includes a giant rating gap, calculated and covert maneuvering, and outright fury on both sides. Below are the seven juiciest (yes, corporate takeover attitude can be juicy!) Details from the report.
IndieWire reached out to Disney and Comcast for comment on the WSJ story. We did not immediately receive a response from either side.
It’s not a rating gap, it’s a canyon
Unsurprisingly, Comcast, which will likely sell its one-third ownership stake in Hulu to Disney in early 2024, has a far more generous valuation in mind than its would-be buyer, Disney. However, the gap between their respective internal ratings is wider than many probably thought.
In 2021, NBCUniversal executives estimated the value of Hulu “north of $70 billion,” according to WSJ sources. Disney’s own valuation of the service is “tens of billions of dollars” lower. In 2023, even Comcast/NBCU is unlikely to peg Hulu’s valuation at $70 billion, but it wouldn’t hurt to try!
The years-ago deal between the broadcasters valued the streamer at a minimum of $27.5 billion, but it was based on Disney using Hulu as an international service, a person with knowledge of that original deal told IndieWire. Based on that number, a third of Comcast is a little north of $9 billion. But of course, this is only the agreed minimum value.
If the two sides are unable to reach agreement on the assessment, “an independent third party will be enlisted to make a decision,” the Journal wrote. Comcast can force Disney to buy its stake in January.
ComcastExpired notices of
Disney’s NBCUniversal and Comcast each have their own flagship streamers, and WSJ said that as the fight for Hulu unfolds, Comcast has simply stopped doing its part to keep the service going. Not only did NBCU pull next-day NBC programming from Hulu in favor of Peacock, but its parent company stopped funding Hulu. Disney was forced to continue with what the Journal called “the equivalent of a bridging loan.”
It’s unclear when Comcast stopped funding Hulu or how much it withheld. If Disney and Comcast reach an agreement on ownership, then the two will agree on past payments.
Disney+ has been “Hulking” for over a year
Disney just announced its plans to integrate Hulu content into Disney+ in the US with a Hulu “tile” later this year, but the WSJ report suggests that Disney has been talking about it internally for “more than one year”. The plan even had a Marvel-themed name: “Project Hulk.”
And guess what? That tile was news to Comcast’s top executives.
You wouldn’t like Iger when he’s angry
In 2013, when Hulu was owned by NBC, Fox and ABC, there was a plan to sell Hulu. Top suitors included Yahoo, DirecTV and Time Warner. (Actually, that was another time.) According to the WSJ, Comcast blocked the sale, which infuriated Iger and his team. Comcast felt the bids were too low and assured Disney and Fox that Hulu could grow big. The revenue share payments meant Hulu lost money even as it added subscribers, the Journal wrote.
Shhh… Disney is changing the rules
When Hulu struck major deals with its owners ABC, Fox or NBC, it had to get unanimous approval from all three parent companies to avoid self-dealing. That rule quietly disappeared shortly before Disney announced its acquisition of Fox in late 2017, according to WSJ, which left Comcast unable to block any major decisions (Comcast has agreed to be a silent, inactive partner in Hulu). as part of the NBCUniversal acquisition in 2011).
Comcast, however, didn’t find out about the rule change… until September 2018 and reportedly threatened legal action. You know what happened next: Comcast also pursued the acquisition of Fox’s assets and just ended up driving up the price for Disney. When the deal closed in March 2019, Fox’s price was $71.3 billion.
Missed launch (internationally)
The reason Comcast agreed to the rule changes is that it believed Disney would work to launch Hulu overseas and increase the value of the streamer. But as the WSJ now reports, Disney believes it made no such promise. In 2020, former Disney CEO Bob Chapek made the Star brand a building block on Disney+ overseas, as well as the international face of its overall entertainment offering.
Cloudy with possibility of content
While Disney is now much more likely to buy out Comcast, Comcast has considered otherwise. The hiccup, beyond the money (if Comcast thinks Hulu is worth $70 billion, two-thirds of Disney would be worth about $47 billion), was the opacity about whether a Comcast acquisition would include the rights to all content by Hulu.