Late last year, Disney and Comcast closed a deal giving Disney full control over Hulu. However, they have not agreed on a final price, and both parties are now seeking external help to settle the matter.
Disagreement on Hulu’s Valuation:
- Disney’s Position: Disney wants to adhere to the original valuation of Hulu.
- Comcast’s Position: Comcast demands a higher price, asserting that Hulu is now more valuable.
According to the Wall Street Journal, the dispute might lead to a court battle over Hulu’s price.
Resolution Process:
- Both companies will hire outside investment banking firms to determine Hulu’s sale price.
- If the valuations differ by more than 10%, a third firm will be chosen to provide its own estimate.
- The final sale price will be the average of the two closest valuations.
Factors for Valuation:
- Hulu’s historical financial and operating results based on audited statements.
- Valuation as a going concern with current business activities.
- Future business prospects and projected results, assuming Disney’s assets and rights remain available to Hulu.
Current Valuations:
- Set Five Years Ago: $27.5 billion
- Comcast’s Estimate: Over $40 billion
- Disney’s Estimate: Closer to the original $27.5 billion
Next Steps:
- Disney and Comcast are seeking a third-party advisor to resolve the valuation question.
- A court fight remains a possibility if they cannot agree.