Disney completed its acquisition of 21st Century Fox in 2019, giving it ownership of the majority stake in Hulu, and can buy out Comcast’s remaining 33% stake as early as January 2024. Bazinet estimates that Hulu’s value could be anywhere between $19.8 billion and $27.5 billion. Disney has not yet commented on this suggestion, and there has been no response from Comcast.
Bazinet believes that Disney is “less interested” in a mass market streaming offering after CEO Bob Iger stated his intention to focus more on core franchises and “aggressively curate our general entertainment content.” The analyst suggested that this could lead Disney to sell its Hulu stake, and depending on the sale price and how Disney uses the proceeds, there could be a “wide range of outcomes” for Disney stock on such a deal, with the potential to shave up to $3 from the stock or add as much as $13.
Hulu, home to hit shows such as “The Handmaid’s Tale” and “The Dropout,” has been an odd fit for the family-friendly Disney, which has instead focused on growing Disney+ since its launch in November 2019. In the fiscal first quarter, Hulu had 48 million subscribers, while ESPN+ and Disney+ had 24.9 million and 161.8 million subscribers, respectively. The company experienced its first quarterly decline in subscribers at Disney+ of 2.4 million and reported a $1.1 billion loss in its streaming division, which includes these properties. While this was an improvement compared to the $1.5 billion loss in the fourth quarter, it still represents an uphill battle for Iger.