Walt Disney Co. won’t make any decisions on selling its majority ownership in Hulu or acquiring Comcast Corp.’s stake before gaining a better understanding of the streaming platform’s potential for growth and profitability.
(Bloomberg) — Walt Disney Co. won’t make any decisions on selling its majority ownership in Hulu or acquiring Comcast Corp.’s stake before gaining a better understanding of the streaming platform’s potential for growth and profitability.
“We’re really studying the business very, very carefully, all those competitive dynamics, with an understanding that we have a good platform in Hulu,” Chief Executive Officer Bob Iger said Thursday at a Morgan Stanley conference.
Disney has appointed Goldman Sachs Group Inc. to advise on its option to buy Comcast’s one-third stake in Hulu in 2024, a deal that would value the platform at a minimum of $27.5 billion. Iger said the streaming industry is “very, very tricky” at the moment. In recent months, shareholders have focused more on the profitability of online platforms after years of favoring subscriber growth.
Earlier this week, Comcast President Mike Cavanagh said at the same conference that his company would consider alternative proposals for its Hulu stake, but the terms have to be better than its agreement with Disney.
On Thursday, Iger said the company hasn’t priced subscriptions to its flagship Disney+ streaming service as well as it might have, citing promotions designed to attract new customers.
“Other than Netflix, which is relatively mature, it’s a nascent business for most of us,” Iger said.
Last month, Iger, who returned to lead Disney in November, announced plans to overhaul the world’s largest entertainment company, including 7,000 job cuts and $5.5 billion in cost savings.
The reductions included plans to trim $3 billion from its budget for movies and TV shows, with the rest coming from areas other than content.
As part of the restructuring, Disney will be reorganized into three divisions: an entertainment unit that includes its main TV, film and streaming businesses; the ESPN sports networks; and the theme-park unit, which also includes cruise ships and consumer products.
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