Disney To Assume Full Control Of Hulu From Comcast

(RTTNews) - Walt Disney Co. (DIS) entered into an agreement to take full operational control of Hulu from Comcast Corp. (CMCSA), with immediate effect, the companies said in a statement.

As per the agreement, Comcast can require Disney to buy NBCUniversal's 33 percent stake in Hulu as early as January 2024 for valuation of at least $27.5 billion.

Disney and Comcast agreed to finance Hulu's recent purchase of AT&T Inc.'s (T) 9.5 percent stake in Hulu. Comcast can opt to fund its proportionate share of Hulu's future capital calls.

Disney also agreed that only $1.5 billion of any year's capital calls can be funded through further equity investments, and anything over that should be funded by non-diluting debt. It is also agreed that Comcast's ownership interest in Hulu will never go below 21 percent. Comcast is guaranteed to get at least $5.8 billion under the agreement.

Comcast has also agreed with Hulu to extend the Hulu license of NBCUniversal content and the Hulu Live carriage agreement for NBCUniversal channels until 2024 and to distribute Hulu on its Xfinity X1 platform.

NBCUniversal can terminate most of its content license agreements with Hulu in three years' time. In one year's time NBCUniversal will have the right to exhibit on its own OTT service certain content that it presently licenses exclusively to Hulu. This is in return for reducing the license fee payable by Hulu.