Disney and Comcast are in arbitration over the valuation of their joint venture Hulu. Comcast has accused Disney of delaying the international launch of loss-making Hulu in order to push down the price it has to pay for buying out Comcast's 33 percent stake, The Information reports.
The companies agreed in 2019 a put-call option that gives Comcast the right to sell from 2024, and according to the report, its stake could be worth anywhere from USD 9 billion to USD 13 billion. Buying Comcast’s stake would give Disney full ownership of Hulu.
Since the shareholders agreement was struck in 2019, Comcast has stopped paying for its share of Hulu’s funding needs, a person familiar with the situation told The Information. Comcast isn’t required to keep funding Hulu, under the agreement with Disney. But if it does not contribute to equity calls, Comcast's stake may dilute to as low as 21 percent. The rate of dilution is what has taken the companies to arbitration, as they are unable to agree on a value for Hulu.
According to the report and its unnamed sources, Disney abandoned the Hulu international expansion in 2020 when it was faced with losses due to the coronavirus pandemic in other parts of the business and the costs of rolling out Disney+ worldwide. It later added some of the Hulu content to Disney+ under the Star label.
Comcast claims the move held back Hulu's growth. Disney argues that it has supported Hulu's growth in the US through its bundled offer with Disney+ and ESPN, and Hulu has little name recognition and not enough rights outside the US to go international.
