The Walt Disney Company seems inextricably linked to purchasing the remainder of Hulu, even though it may cost the company upwards of twenty billion dollars.
There has been much made of the situation regarding The Walt Disney Company and their efforts to buy Hulu. Yet many have misunderstood what is happening. Some think that it will bankrupt the company (it won’t), others think they’ll sell huge swaths of property to gather the funds (unlikely). While Mickey may need to check his credit as he gets ready to make such a massive purchase, the truth is that Disney is stuck buying Hulu for all intents and purposes and it’s just a matter of scrapping together a ton of money, stock, and more in an effort to eat the bill from Comcast.
Yes, Disney had thought they could get Hulu for far cheaper than Comcast now demands. At least, that’s what we were publicly told from the company. But now we know that Comcast values Hulu at more than seventy billion dollars total — and since Disney is stuck buying a third of the remaining Comcast hold, Disney is going to be paying a ton of money, even if they come to a middle ground via arbitration.
But why does Disney have to buy Hulu? Why can’t they just walk?
Well, according to a source, Disney has already stepped in it by beginning to merge the Hulu and Disney+ services. This is a very costly endeavor, one that likely costs more than a billion dollars if it works anything like the Max consolidation did with their streaming service. For you see, Hulu and Disney+ will be combined into a single electronic architecture if all goes according to plans. Hulu will just be a blade at the top of Disney+ like Star Wars, Pixar or Marvel. In order to make that happen, however, all of Hulu has to be copied over to Disney+. And that requires an awful lot of effort and infrastrucutre.
Now, we’re seeing that the source seems to have been correct. Check out this quote from What’s On Disney Plus:
Earlier this month, Disney+ Hotstar in India added a new Hulu hub, which was a surprise, considering we’ve not seen any expansion of Hulu internationally since Disney gained control of the streaming platform in 2019. Since Hulu only operates in the United States (and in Japan, though it’s not connected to Disney).
Unfortunately, since Comcast still owns one-third of Hulu, Disney can’t do a full merger between Hulu and Disney+ just yet, but last month, Disney CEO Bob Iger revealed during a quarterly investor call that they plan on having a one-app experience available within the United States later this year, which will bring Hulu content into Disney+ for subscribers to the Disney Streaming Bundle.
By this admission, it would seem that Disney has already merged the infrastrucutres in at least some territories. And that likely means all territories. If the money has already been spent, the effort already made, it’s hard to see how Disney would walk away from the deal… even if it is no deal for them. In fact, you might see Disney having to spend even more money if the deal didn’t go through! After all, it would cost a significant amount of cash to now delete and extricate the Hulu code from Disney+.
For now, it seems that Disney is on the hook to pick up Hulu. That’s regardless of the costs.
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That is just stupid…I already spent 1 billion dollars so might as well spend another 10 to 20 billion for content disney already owns. Better to move all disney content on hulu to disney+ and call it 20th century and give the rest of hulu to Comcast for free. Comcast and disney pay to make it run. That means that hulu by itself doesn’t even break even
“infrastrucutre”, is that French? ;-)
Typo alerts.
First line. “by Hulu” should be “buy Hulu”.
Second line, “others think they’ll sale huge swaths of property” does not scan quite right. I think it should be “sell” not “sale”.
I’m surprised by the coolness of major investors at this merging move and the cost. But I continue to hope Mr. Iger isn’t being idle and his appearance at WWDC was the first stage in a major deal with Apple to help Disney afford Hulu. Other than that I still continue that Lucasfilm should hire me to write stories for their future movies. They do that their problems will be well on the way to being solved.
Hulu at $70 billion represents 25% of Disney’s current value.
If True, Disney+ is likely 25%. The parks, hotels, cruise ships, and merchandise are more than 50%. ESPN and the cable channels have significant value too.
Disney studios are a negative value to the company.
Disney needs content for Hulu and Disney+, but they need content people care about. Pixar, Marvel, and Lucas are damaged brands.
Disney knows this, and Disney needs money to complete the Hulu deal.
Expect one of the three sold to pay for Hulu.
Lucas can be sold with Disney holding the Park rights for 5 years followed by a friendly lease for 5 years. Or some other friendly negotiation.
Marvel can be exchanged with Universal for Hulu plus cash.
Pixar can be sold to Apple, so Jon Lasseter can make magic again.