Disney is likely to have to write a big check to buy Comcast’s one-third stake in Hulu, CEO Bob Roberts hinted on Tuesday.
“I think we have a very valuable position,” Roberts told the MoffettNathanson Inaugural Technology, Media and Telecom conference during a session that was webcast. The NBCUniversal owner and pay TV, media and technology giant has to decide on the future of its one-third stake in Hulu, while potentially using a put option that would require Disney, which owns the remaining two-thirds, to take over its minority stake.
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Roberts pointed to Disney’s analyst call last week following the release of that studio’s latest financial results and CEO Bob Iger talking up the importance of general entertainment content (as seen on Hulu). “I think it’s more likely than not … that we’ll put, they’ll call at the beginning of next year,” the Comcast CEO said with an eye to an earlier agreement that would allow the studio to exercise a right to sell its Hulu stake at a negotiated price.
Iger told investors that recent talks with Comcast had been constructive. “I can’t tell you and I can’t really say where they end up, only to say that there seems to be real value in having general entertainment combined with Disney+. And if, ultimately, Hulu is that solution, that’s we’re — we’re bullish about that,” the Disney CEO told analysts on the call as the studio also has plans to combine Hulu content with Disney+ content into one app in the U.S. market.
On Tuesday, Roberts predicted Comcast shareholders will do well from a possible sale of the Hulu stake. “I’m pretty certain that when we sell our Hulu stake, it’ll be for more than what we have in it. In fact, that’s contractually certain,” Roberts added. A valuation for Hulu with a floor of $27.5 billion was set in 2019 as part of an agreement between Comcast and Disney and a final price for the one-third stake will likely be higher.
During the investors conference appearance, he also talked about the recent shock ouster of NBCUniversal CEO Jeff Shell. Mike Cavanagh, president of Comcast, has filled in for Shell on an interim basis, with no indication on how long he will assume that role.
“We’re going through some interesting situations at NBCUniversal on the personnel front. Mike taking the reins immediately has calmed everybody. They’re excited to be working with him,” Roberts said as he reiterated his backing for Cavanagh after he assumed more direct control over NBCUniveral in the wake of Shell’s exit.
NBCUniversal, like rival Hollywood studios, is also having to offset the audience and advertising revenue declines of its traditional TV networks with new investments in streaming, while Wall Street looks for signs of profitability. Roberts talked about streaming, including the studio’s Peacock platform, as an extension of NBCUniversal’s overall media business, and not a separate venture.
“For us, streaming was a way to take advantage of the technology shift and bring that (NBCU) content to an audience on any device, anywhere they want to do it. We are making money in streaming,” he said.
