Comcast has had a frustrating run as a partial owner of video streaming platform Hulu, but that doesn’t make the decision to sell its minority stake in the company any easier.
Disney and Comcast are holding talks about working out a deal for Comcast’s 30% stake, according to people familiar with the matter. Comcast is now weighing the pros and cons of doing a deal now rather than later, said these people, who asked not to be named because the discussions are private. It’s still unclear if a deal will transpire.
The two companies are the last remaining owners of a company that was originally founded as a joint venture between several media giants. Hulu last week bought back a 9.5% stake in itself from Time-Warner owner AT&T, in a deal that values Hulu at $15 billion. That 9.5% stake will be split between Disney and Comcast, unless Disney consolidates the entire company.
“On Hulu, the relationship with NBC, it’s very much in everybody’s interest to maintain,” Comcast CEO Brian Roberts said Thursday during an interview on CNBC’s “Squawk Box.” “And we have no new news today on it, other than it’s really valuable. And we’re really glad we own a large piece of it.”
For years, Comcast was barred from having a say in Hulu’s direction — part of a consent decree Comcast agreed to when it acquired NBCUniversal in 2011. (NBCUniversal is the parent company of CNBC.)
Seven years later, Comcast’s ownership in Hulu switched from passive to active, when the consent decree expired in 2018. That gave Roberts and NBC CEO Steve Burke some say in the company’s future.
But just as Comcast came off the sidelines, 21st Century Fox agreed to sell its 30% stake in Hulu to Disney. That deal, which closed last month, effectively silenced Comcast once again. Instead of being an equal owner with Fox and Disney, Comcast now owns a minority stake to Disney’s 60%.
“Fifty years from now will we be in Hulu? No, I don’t think we will,” Burke told Variety in January. “But I don’t think we’ll sell in five minutes.”
As of today, NBC provides about 17% of Hulu’s content. NBC has no plans to remove content from Hulu, which will continue to serve as NBC’s vessel for same-season shows even after the launch of the company’s new streaming service in 2020, according to people familiar with the matter. (NBC’s streaming service will showcase the company’s library of TV shows and movies.)
There are compelling reasons for Comcast to hold and to sell. Here’s what Comcast is debating, according to people familiar with the company’s thinking.