Comcast relinquishes full control of Hulu to Disney

Comcast announced that it has reached a deal allowing Disney to take full operational control of Hulu, effective immediately. Under the terms of the deal, Comcast as early as 2024 can require Disney to buy its 33% stake in Hulu, and Disney can require Comcast to sell that stake at a fair market value. Disney is guaranteeing a minimum total equity value of Hulu at that time of $27.5 billion.Comcast also agreed to extend its NBCUniversal distribution agreement with Hulu’s on-demand and live TV services until late 2024. Comcast also said it will distribute Hulu on its Xfinity X1 pay TV platform. NBCUniversal can terminate most of its content license agreements with Hulu in three years’ time, and in one year NBCUniversal will have the right to show on its own OTT service (launching in 2020) certain content that it currently licenses exclusively to Hulu in return for reducing the license fee payable by Hulu. Comcast and Disney also agreed to fund Hulu’s recent purchase of AT&T’s 9.5% interest in Hulu, rated according to the current two-thirds, one-third ownership structure.With this deal Disney eliminates some of the operational overhang with Hulu, which along with ESPN+ and the upcoming Disney+ streaming service is a key part of Disney’s direct-to-consumer streaming strategy.