The Walt Disney Company gained full operational control of Hulu today as announced by Disney and Comcast in a joint statement.  Disney gained control in return for the two companies entering to a put/call agreement regarding NBCUniversal’s 33 percent ownership interest.Under the put/call agreement, as early as January 2024, Comcast can require Disney to buy NBCUniversal’s interest in Hulu, and Disney can require NBCUniversal to sell that interest to Disney for its fair market value at that future time.

When the time comes, Hulu’s fair market value will be set by independent experts, however, Disney has guaranteed a sale for Comcast that represents a minimum total equity value of Hulu at that time of $27.5 billion.

“Hulu represents the best of television, with its incredible array of award-winning original content, rich library of popular series and movies, and live TV offerings. We are now able to completely integrate Hulu into our direct-to-consumer business and leverage the full power of The Walt Disney Company’s brands and creative engines to make the service even more compelling and a greater value for consumers,” said Robert A. Iger, Chairman and Chief Executive Officer, The Walt Disney Company, in a statement this morning.

Disney and Comcast have agreed to fund Hulu’s recent purchase of AT&T Inc.’s 9.5 percent interest in Hulu, pro rata to their current two thirds/one third ownership interests. Going forward, Comcast will have the option but not the obligation to fund its proportionate share of Hulu’s future capital calls and will be diluted if it elects not to fund. Disney has agreed that Comcast’s ownership interest in Hulu will never be less than 21 percent such that Comcast is guaranteed to receive at least $5.8 billion under the put/call agreement.

In addition, Comcast has agreed with Hulu to extend the Hulu license of NBCUniversal content and the Hulu Live carriage agreement for NBCUniversal channels until late 2024 and to distribute Hulu on its Xfinity X1 platform. NBCUniversal can terminate most of its content license agreements with Hulu in three years’ time, and in one year’s time NBCUniversal will have the right to exhibit on its own over-the-top (OTT) service certain content that it currently licenses exclusively to Hulu in return for reducing the license fee payable by Hulu.

How will this agreement impact the future of streaming? Share your thoughts in the comments.

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