BURBANK, Calif. (AP) — Disney is taking full control of Hulu, extending the reach of its streaming abilities. Disney said Tuesday that it's taking operational control of the streaming service immediately.
NBCUniversal owns 33% of Hulu right now. According to the agreement, Disney can demand Comcast, which owns NBCUniversal, sell the remaining stake to Disney for its fair market value in the future. Disney has guaranteed a sale price that represents a minimum total equity value of $27.5 billion.
And Comcast can require Disney to buy its stake in early 2024.
Walt Disney Co. and Comcast Corp. also agreed to fund Hulu's recent purchase of AT&T Inc.'s 9.5% interest in Hulu. When Hulu make that deal in April, it was rumored that Comcast would allow Disney to acquire whatever part of Hulu it still owned.
"Whether Comcast funds its share of those equity capital calls or not, Disney has agreed that Comcast's ownership interest in Hulu will never be less than 21% such that Comcast is guaranteed to receive at least $5.8 billion under the put/call agreement," the two companies said in a press release.
Disney may bundle Hulu with its upcoming kids-focused streaming service, Disney Plus, and its sports service, ESPN Plus, executives said last week.
Hulu's $6-a-month service lets users watch original series and network TV episodes after they air on TV. It has a newer live-TV service that costs $45 a month.
AT&T came by its Hulu stake after buying Time Warner, which invested $583 million in Hulu in 2016. Now the company, known as WarnerMedia, is launching its own streaming service this year, which will focus on HBO and other shows and movies owned by the company.
NBCUniversal, too, will debut a streaming service in 2020.
Comcast, as part of the deal announced Tuesday, will extend the Hulu license of NBCUniversal content and the Hulu Live carriage agreement for NBCUniversal channels until late 2024. NBCUniversal can cut off its content for Hulu within three years, if no new agreement exists.
(© Copyright 2019 CBS Broadcasting Inc. All Rights Reserved. The Associated Press contributed to this report.)
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