On Wednesday, Walt Disney revealed that it might need to pay up to $5 billion more to acquire Comcast’s minority stake in Hulu, depending on the outcome of an appraisal dispute.
Earlier this year, Disney and Comcast engaged RBC Capital, an independent investment bank, to assess the value of Comcast’s 33% stake in Hulu. This move was prompted by disagreements over the stake’s valuation, with Comcast suggesting it could be worth more than $40 billion. Reuters reported in May that Disney and Comcast were seeking independent advice to resolve the matter.
The companies are currently in arbitration, with a final resolution expected in fiscal 2025. The dispute stems from a 2019 agreement, which followed Disney’s $71 billion acquisition of Fox’s assets, including its minority stake in Hulu. This deal gave Disney majority control over Hulu, while Comcast retained its stake, anticipating a significant increase in value by 2024.
In November of the previous year, Disney agreed to take full control of Hulu, committing to pay Comcast at least $8.6 billion for its remaining 33% stake, as stipulated in the 2019 agreement.
Disney stated that if the appraisal values the stake at or below the guaranteed floor of $27.5 billion, it will not owe Comcast more than the $8.6 billion already paid. However, if the valuation aligns with Comcast’s higher estimate, Disney would need to pay an additional $5 billion. Should the appraisal fall between the initial evaluations, Disney’s additional payment could range from $0 to approximately $5 billion.
