Posted on Wednesday February 27th, 2019 by Ben Pearson
A new report indicates that Disney is currently in talks with WarnerMedia to acquire the company's 10% stake in Hulu, confirming a rumor that circulated at the end of last year. Find out what this acquisition would mean as we move toward a future of entertainment that will seemingly dominated by streaming services.
According to Variety, Disney has "active discussions" with WarnerMedia's parent company, AT & T, to purchase the remaining 10% of Warner's streaming platform. Hulu was founded as a joint venture between several major media companies. At present, Disney owns 30%, 21st Century Fox, 30%, Comcast (NBCUniversal), 30% and AT & T (WarnerMedia), 10%. As soon as the Disney / Fox acquisition gets the regulatory approval it needs (which could happen within a day), Disney will own most of 21st Century Fox's assets, including its stake in Hulu, giving Mouse House an overall share of 60% of the capital. streamer.
Now, Disney is aiming for an even higher percentage and finally seems to want to own it all. Previous reports suggested playing a role for the remaining 30% of Comcast's Hulu, which is something that Comcast's CEO Steve Burke confirmed but resisted:
"Disney would like to buy us. I do not think anything will happen in the short term. "
Here's why Disney cares about Hulu:
Disney to use Hulu as home for adult programming
Bob IgerThe CEO of Walt Disney Company has spoken openly about his desire to increase investment in Hulu, particularly with respect to programming. If Hulu manages to create more engaging programming for an international audience, it will be able to increase the reach of its global subscription – something that Iger certainly wants to see happen under its responsibility.
Part of the project, at least what the press has described so far, is to make Hulu a hub of programming targeting a more mature audience, while Disney + will be primarily a family format. By maintaining a separation between the two, Disney reduces the risk of dilution of the brand they have built for so many decades.
It is unclear how much Disney would pay for WarnerMedia's 10% stake in Hulu, though Variety has figured a few numbers in its report:
Last summer, Disney set Hulu's fair value at $ 9.296 billion after finalizing the transaction with 21st Century Fox, including an implicit control premium of $ 1.246 billion. The $ 930 million implicit value of WarnerMedia's interest represents a premium of 16% on Time Warner's initial investment of $ 583 million in Hulu in August 2016, plus its subsequent capital contributions of $ 200 million to the streamer.
Owning 10% of Hulu (which currently has about 25 million subscribers) is simply not worth the Warners effort at the moment. They are about to launch their own streaming service later this year, so maybe we could think that they can earn a little money with a rival, cut ties with a company on which they do not have the power anyway, and focus their efforts on building a subscriber base for their own product. We will update this article if both companies enter into an agreement.
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