Disney’s Hulu Takeover Sets Stage for Deeper ESPN Integration

Disney is set to own all of Hulu, advancing its already aggressive streaming interests further, but the process to get there was anything but straightforward.

The ESPN parent company said it has reached an agreement with NBC Sports parent Comcast to acquire the 33% of the general-interest streamer it doesn’t already own, and will pay an additional $438.7 million for that equity. Set to close next month, the agreement will give Disney full control of the bundle of Disney+, Hulu, and ESPN+ that is currently the foundation of its streaming presence. 

Getting to the final price, however, required a third-party valuation. After originally striking the deal in 2019, Disney paid Comcast’s NBCUniversal about $8.6 billion in late 2023, reflecting a guaranteed floor valuation of $27.5 billion for all of Hulu, minus NBCUniversal’s unpaid capital call contributions. 

The remaining question was how much more in fair market value Disney would need to pay to complete the agreement. An NBCUniversal appraiser submitted a valuation that would have required Disney to make an additional payment of about $5 billion, suggesting a total valuation of Hulu at nearly $40 billion. Disney, conversely, “arrived at a valuation below the guaranteed floor value,” the company said. Ultimately, the final payment took into account the valuation of a third appraiser.

Long and Winding Road

Hulu began in 2007 as an early player in a still-nascent streaming market, and initially as a joint venture between News Corp. and NBCUniversal, which was not yet owned by Comcast. Over the years, several different ownership structures for Hulu emerged, including with Disney, but those partnerships ultimately faded as each major media company pursued its own streaming strategy. 

That separation then became intertwined with the lengthy Hulu valuation process. The service is now home to hit series such as Only Murders in the Building. 

“Hulu was a great start for us in streaming that generated nearly $10 billion in proceeds for Comcast and created an important audience for NBCUniversal’s world-class content,” Comcast said in a statement. “We wish Disney well with Hulu.”

Disney had already placed some of its sports content within Hulu to reach a broader audience, and more such efforts are likely as the company’s streaming platforms become more interwoven with one another.

“We are pleased this is finally resolved. We have had a productive partnership with NBCUniversal, and we wish them the best of luck,” said Disney CEO Bob Iger in a statement. “Completing the Hulu acquisition paves the way for a deeper and more seamless integration of Hulu’s general entertainment content with Disney+, and, soon, with ESPN’s direct-to-consumer product, providing an unrivaled value proposition for consumers.”

To that latter point, the Hulu agreement also arrives as ESPN draws closer to debuting that DTC streaming service around the start of the college and pro football seasons. Upon unveiling pricing and other details for the service, ESPN executives said they are looking at the critical and much-anticipated effort holistically, including across its other Disney services.

“We are not going to look at one specific platform,” said ESPN chairman Jimmy Pitaro. “We want to be available across platforms, across price points.”