Comcast “Happy” To Sell Hulu Stake To Disney As Deadline Looms; Other Options “Must Be Better, In Our Minds, Than That”

Comcast President Mike Cavanagh said the media giant would of course consider alternative proposals for its stake in Hulu but they’d have to top its longstanding agreement to sell its remaining stake in the streamer to Disney next year.

Disney has been going through a bumpy patch and returned CEO Bob Iger indicated recently that paying billions to buy in Hulu may not be a top priority. Under a four-year old, put-call agreement, Comcast can force Disney to buy the stake (or Disney can force Comcast to sell it) early next year.

Asked about Iger’s comments at a Morgan Stanley media conference today, Cavanagh, the CFO who was elevated last fall and works very closely with Comcast CEO Brian Roberts, said: “On this one, remember they and we, back in 2019, put together a very clean and good agreement for a put-call that does happen in early 2024.”

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“We are very happy with that,” he said. “But, if there is something different that comes along, we have to consider things. But we won’t do something unless it is better in our minds than that.”

There’s been ongoing jockeying surrounding Hulu for some time. Iger will appear the same conference tomorrow, his first appearance after saying last month that he’d be open to selling Hulu, instead of buying it. 

“Everything is on the table right now, so I am not going to speculate whether we are a buyer or a seller of it. But I obviously have suggested that I’m concerned about undifferentiated general entertainment, particularly in the competitive landscape that we are operating in, and we are going to look at it very objectively and expansively,” he told CNBC Feb. 9 after the company had reported quarterly earnings, and managed to extricate itself from a proxy fight with activist investor Nelson Peltz.

The Hulu agreement calls for the streamer’s valuation at deal time to be set by independent experts but gives a guaranteed minimum valuation of $27.5 billion, meaning Comcast’s one-third stake would cost at least $9 billion. Disney already owns the other two-thirds.

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