Comcast (CMCSA) and Disney (DIS) executives were reportedly in disagreement over how much the streaming service they jointly own, Hulu, was worth in recent years — underscoring the complexities in the platform's ongoing ownership fight.
According to The Wall Street Journal, NBCUniversal executives estimated Hulu’s valuation to be more than $70 billion in 2021 — the height of the streaming boom — while Disney's valuation "has been tens of billions of dollars lower."
The new details come as the valuation of Hulu has been a hot topic for Wall Street. Disney currently owns two-thirds of Hulu with Comcast’s Universal controlling the rest. Under the terms of the joint ownership agreement, Comcast could require Disney to buy out its stake in the streamer as early as January 2024.
Executives at both companies have voiced expectations that Comcast will sell to Disney — echoing similar reporting from The Journal, which said Comcast has stopped funding Hulu in anticipation of the sale. Disney has provided the equivalent of a bridge loan to ensure the streamer gets the necessary cash.
"I think it's more likely than not that we go through," Comcast CEO Brian Roberts said earlier this month.. "We've said all along that the vast majority case is we'll put [and] they'll call at the beginning of next year."
Comcast reportedly weighed purchasing Disney's majority stake at one point but changed course due to content rights concerns as a significant portion of Hulu's content is owned by Disney.
Disney CEO Bob Iger recently reversed course regarding his previous Hulu stance and the value of general entertainment.
"I've now had another three months to really study this carefully and figure out what is the best path for us to grow this business," Iger said on on the company's recent earnings call. "It's clear that a combination of the content that is on Disney+ with general entertainment is a very positive."
The company revealed it will soon offer a one-app experience domestically that incorporates Hulu content via Disney+ — a decision Comcast was reportedly not privy to.
Sources told The Journal the combination could further complicate the market value of Hulu. Under the current agreement, Hulu would be priced at a guaranteed minimum equity value of $27.5 billion (or about $9.2 billion for the 33% stake.)
Each company will reassess Hulu's value in early 2024 and enlist an independent third party if the valuations are still far apart, the report added.
Hulu boasts just over 48 million subscribers and hosts top-rated shows including "Only Murders in the Building," "The Handmaids Tale," and "The Dropout." Hulu's subscriber growth was flat in Disney's latest quarter.
The report said the companies had been at odds over the partnership in the past.
For instance, Comcast claims Disney hurt Hulu's profits by failing to launch the platform overseas, while Disney says it never promised an international rollout and that launching one would have been too costly, according to the Journal.
The two are locked in an arbitration dispute as a result of the disagreement.
Disney and Comcast did not immediately respond to Yahoo Finance's request for comment on both Hulu's valuation and the arbitration case. Disney shares were down about 1% in early afternoon trading. Comcast shares dipped roughly 2.5%.