Comcast in talks to sell Hulu stake to Disney

Comcast is in talks about selling its 30 percent stake in Hulu to Disney, according to a report from CNBC this morning. The discussions are still in early stages. Comcast is considering whether the timing is right for the sale, as Hulu’s valuation could still increase over time. But if Comcast is less certain about Hulu’s future, it may want to unload its minority stake now, then use the cash to pay down its other debt — like that from its $39 billion acquisition of Sky, for example.

The report weighs the broader set of pro’s and con’s associated the potential deal, noting that retaining the stake could give Comcast a bargaining chip with Disney further down the road, among other advantages. But it’s also unclear how much Hulu aligns with Comcast’s long-term strategic plans — especially considering it has plans for its own streaming service in 2020. 

In addition, Hulu is expected to generate losses, and won’t turn profitable until 2024, Disney has said. It also plans to expand Hulu outside the U.S., which is an added cost.

Disney today has majority ownership of Hulu, following its acquisition of 21st Century Fox’s 30 percent stake and this month’s deal with AT&T. The latter saw Disney picking up AT&T’s 9.5 percent stake for $1.43 billion. The AT&T deal valued Hulu at $15 billion. That means Comcast’s stake could be worth roughly around $5 billion.

Up until recently, Comcast was not looking to sell its ownership in Hulu. A Variety report from February said that Comcast didn’t want to exit the joint venture at this time, even though Disney was itching to buy them out. It’s natural that Disney and Comcast would still be having an ongoing dialog about this, given Disney’s ambitions. But the new report today seems to indicate these talks are now of a more serious nature — perhaps because Disney is upping what it’s willing to pay.

Comcast today provides 17 percent of Hulu’s content, and it doesn’t plan to remove that content any time soon, including after the launch of the NBC streaming service, CNBC said.