Comcast in talks to sell 30% stake in Hulu to Disney: report

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Hulu has historically been a money loser for its owners. (Hulu)

After AT&T recently exited Hulu by selling its 9.5% stake back to the streaming service, Comcast reportedly is considering an exit, which would give Disney full control of Hulu.

According to CNBC, Disney and Comcast are in talks about deal, which is leading Comcast to actively consider the pros and cons of selling its interest in Hulu.

One big consideration mentioned by the report is valuation for Hulu. Comcast on one hand could be convinced to keep its 30% Hulu stake given the service’s rise in valuation. As the report points out, Hulu’s value has climbed from $5.8 billion to $15 billion since mid-2016. But much of that gain has occurred in the past few months. In November 2018, Disney said in a regulatory filing that Hulu was worth approximately $9.3 billion. But after AT&T earlier this month sold its stake in Hulu for $1.43 billion, Hulu’s valuation jumped to $15 billion.

RELATED: Hulu buys back AT&T’s minority share of streaming service for $1.4B

Comcast also is considering reasons to keep its stake, like the ability to maintain board seats, some control over Hulu and leverage over Disney, its close competitor. But, the company is also thinking about factors like Hulu's ongoing losses as reasons to sell.

Hulu has historically been a money loser for its owners. Disney predicted those operating losses will peak this year at $1.5 billion, and that Hulu will achieve profitability by 2023 or 2024. Disney also predicts that Hulu will grow to between 40 million and 60 million subscribers (it’s currently at 25 million) by 2024.

Regardless of Comcast’s decision, Hulu will remain an integral part of the company’s streaming strategy. The report said that NBCUniversal, which currently supplies about 17% of Hulu’s content, will continue to put its same-season shows on Hulu even after NBCU’s new streaming service launches next year.

Other recent comments suggest that Comcast is happy with its current stake in Hulu and perhaps not in a rush to sell. NBCUniversal CEO Steve Burke earlier this year told Variety that even though Comcast is launching its own streaming service in 2020, it doesn’t need to hurry into a buyout deal with Disney.

“Fifty years from now will we be in Hulu? No, I don’t think we will. But, I don’t think we’ll sell in five minutes,” Burke told the publication. “Disney would like to buy us out. I don’t think anything’s going to happen in the near term. (NBCU’s service) will be one of many and it’s going to be as competitive with Netflix and Amazon and Hulu as anyone else.”