Comcast & Disney May End Up in Court as They Continue to Fight Over Hulu

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.