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Disney Will Take Full Control of Hulu in Deal With Comcast

Walt Disney Co. will take full operational control of Hulu, in a deal with Comcast Corp. that will value the streaming service at more than $27 billion and steps up the fight against Netflix Inc.

The valuation represents a bet on continued rapid growth for Hulu, home of original hits such as “The Handmaid’s Tale” along with an array of movies and network shows. Just a month ago, Hulu was valued at $15 billion in a deal to buy out AT&T Inc.’s 9.5% stake. In its agreement, Disney guarantees Comcast an equity valuation no lower than $27.5 billion by early 2024, when Comcast can sell its stake to Disney.

Hulu stands to be a key driver in Disney’s aggressive streaming push. The entertainment giant expects Hulu to have as many as 60 million subscribers by fiscal 2024, up from 25 million last year, and is counting on it to complement the new Disney+ streaming service launching in November.

Disney shares rose as much as 1.7% in New York trading, and Comcast gained as much as 0.5%.

The transaction marks the end of one of the most complicated ownership sagas in the entertainment business. Hulu was jointly owned by the world’s biggest media companies — and they often had competing priorities. Disney acquired majority control of Hulu this year by buying Fox’s stake as part of its $71.3 billion purchase of Rupert Murdoch’s entertainment empire.

Disney and Comcast will enter a “put/call” agreement regarding NBC’s 33% ownership interest in Hulu: As early as January 2024, Comcast can require Disney to buy Comcast’s NBCUniversal’s interest in Hulu and Disney can require NBCUniversal to sell that interest to Disney for its fair market value at that time.