Disney’s struggle to fully acquire Hulu has forced the company to raise streaming prices to cover a potential multi-billion dollar bill.
Disney’s recent price increase for streaming services has raised eyebrows among subscribers. This price hike may be linked to an unexpected financial burden.
In a recent report from IndieWire, Disney might have to pay up to 5 billion dollars more for the Hulu acquisition deal, more than initially planned.
This is in addition to the 18.6 billion dollars they gave Comcast in December to acquire 60% of Hulu.
Disney+ is somewhat in a vulnerable position. It struggles to stop Comcast from making additional payments and to buy complete control over Hulu. The arbitrators and independent reviewers are currently handling the issue.
The result may affect Disney’s financial standing. In any case, Disney has put itself in a not very advantageous position, given the current economic climate and the company’s financial problems.
Hulu, which began as a joint venture between Disney, Fox, and Comcast in 2017, was worth $27 billion when Disney acquired Comecast’s stake in 2019.
With its own streaming platform, Peacock, also becoming popular, Comcast, which owns a 33% stake in Hulu, opted to sell its stake in 2023.
Disney paid 8.6 billion for Comecast’s 33% share, leading to a dispute on Hulu’s present worth. Comcast said Hulu’s worth increased to $40 billion after Disney bought Fox, while Disney claimed the value was less. This case resulted in arbitration.
In a filing with the Securities and Exchange Commission, Disney stated that it might need to pay $5 billion more if arbitrators rule in favor of Comcast.
The hikes in the subscription fees for Disney streaming are justified in a bid to hit profitability since the firm expects losses.
In conclusion, if Disney had to spend billions of dollars more, it would not have been as disastrous as Elon Musk acquiring Twitter. He renamed it X for $44 billion in June 2022, and its value is slashed to $20 billion.
