Disney Reportedly Negotiating to Buy AT&T’s 10% Share in Hulu

• Disney is planning to strengthen their Hulu ownership by buying AT&T’s 10%, and then Century Fox’s 30% stake.
• The mass media and entertainment company wants to divide the roles of Disney+ and Hulu into distinctively different ones.
• Comcast will be the only other shareholder if the plan goes through, but they are not planning to sell their stake.

Already owning 30% of Hulu, Disney clearly looks to swallow this service and maximize their control. As reported by Variety, Disney is in talks with AT&T to acquire its stake in Hulu, which accounts for 10% of the company. Reportedly, Disney looks to finalize this move and then proceed to the acquisition of another 30% of Hulu’s ownership, which is held by 21st Century Fox. If the sources are correct, this means that Disney wants to take the lion’s share from a pie that they reckon will grow greatly in the upcoming years.

AT&T is in financial trouble, with their debt sitting at a figure of about $183 billion right now. This means that Disney can seal a very good deal for the 10% Hulu share. AT&T’s CEO had already mentioned back in November, that minor assets such as their Hulu holdings (through Time Warner) may be sold to gain working capital and pay debts. Moreover, the “reboot” plan of WarnerMedia that was only just acquired by the telecom giant includes the launching of their own subscription-streaming service platform by the end of 2019.

From a strictly financial perspective, Time Warner had bought their 10% share in Hulu against $583 million and then invested another $200 million in capital contributions. According to the reports, Disney is offering $930 million, which is making Time Warner a profit of $147 million. If you have been following the streaming service news, you can’t have missed the fact that Disney is about to launch their very own “Disney+” platform that will let people access Disney movies and TV shows exclusively. That said, the acquisition of Hulu’s control may seem to be somewhat “overlapping” with their plans, but it really isn’t.

In fact, Disney has envisioned a globally reaching Hulu which features adult-oriented content, while their Disney+ platform will launch in the US at first, and focus solely on family-friendly content. As Disney’s CEO, Bob Iger stated in November: “After the deal closes and after we have the 60 percent ownership, we’ll meet with the Hulu management team and the board, and discuss what the opportunities are in terms of both global growth and investing more in content.”

As for the remaining 30% of Hulu, if all acquisitions above go well, Comcast is the owner of it, and they are not seeing the prospect of selling it especially lucrative. With a determined powerhouse like the Walt Disney Company on the wheel, why wouldn’t they want to sit back and enjoy the profit ride?

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