The Walt Disney Company will assume full operational control of Hulu, effective immediately, in return for Disney and Comcast Corporation entering into a “put/call” agreement regarding NBCUniversal’s 33 percent ownership interest in Hulu.
Under 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.
Disney and Comcast have 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 agreed that 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.