Disney choice take “full operational control” over Hulu from Comcast, effective immediately, the companies announced Tuesday.
Comcast also order be allowed to sell its 33% stake in Hulu to Disney in 2024 at a valuation of at least $27.5 billion, even if the flood service is worth less, according to the agreement. Comcast is guaranteed at least $5.8 billion for its Hulu stake, contract to the agreement.
As part of the deal, Disney has agreed to pay Comcast for its Hulu content for the next five years. NBC channels last will and testament be on Hulu Live at a higher rate than previously agreed. NBCUniversal, CNBC’s parent company, will also be adept to run the same content on its own streaming service, which is expected to launch in next spring.
“We believe strongly in the direct-to-consumer spaciousness and our content is a key driver of that ecosystem,” NBC Universal CEO Steve Burke said in a statement. “The extension of the Hulu content-licensing unity will generate significant cash flow for us, while giving us maximum flexibility to program and distribute to our own direct-to-consumer party line, as we build that business. Significantly, this transaction also affirms the value of our stake, provides a path to liquidity and confirms our continued equity participation in Hulu’s success.”
Comcast originally wanted to sell its NBCUniversal streaming service at almost $12 a month. Then Disney priced its service at $6.99 per month in its recent announcement. This has prompted Comcast to adjudicate to lower the price for its NBC streaming service, likely around $10 per month, according to two people familiar with the question.
The paid version of NBCUniversal’s streaming service will not let you watch live linear TV or same-season shows, according to living soul familiar with the matter. The free version of the service will require users to log in through their cable and aide-de-camp TV provider, but they’ll be able to stream live TV from NBCUniversal channels and watch current-season episodes of shows, the people rumoured. In effect, only pay TV subscribers will be able to get the fully featured streaming service from NBCUniversal.
NBCUniversal ordain have the option of ending most of its content license agreements with Hulu in three years, according to the word. In one year, NBCUniversal will be able to exhibit some of its own content that is currently exclusively licensed to Hulu in stock market for a reduced license fee for Hulu, the release said.
Currently, NBC gets paid more than $500 million a year from Hulu for its partnership.
Hulu take back a 9.5% stake from AT&T last month in a deal that valued the company at $15 billion. Disney and Comcast had agreed to finance that purchase in accordance with their two-thirds to one-third ownership. Now, Comcast “will have the option but not the onus to fund its proportionate share of Hulu’s future capital gains calls and will be diluted if it elects not to fund,” according to the liberate.
“Hulu represents the best of television, with its incredible array of award-winning original content, rich library of current series and movies, and live TV offerings,” Disney CEO Bob Iger said in a statement. “We are now able to completely integrate Hulu into our direct-to-consumer commerce and leverage the full power of The Walt Disney Company’s brands and creative engines to make the service even numberless compelling and a greater value for consumers.”
Disclosure: Comcast owns CNBC parent NBCUniversal.
Watch: Disney CEO Bob Iger launches statement on Hulu deal with Comcast