"Let the speculation begin," trumpeted analyst Michael Nathanson in a late-week note in which he suggested that Disney avoid a buyout payment of more than $9 billion to Comcast by having Hulu revert to its original joint-venture status.
"Begin"? Baby, we've been speculating on this transaction for nearly two years now.
Eighteen months ago, as part of a negotiation to renew Disney networks on Comcast cable TV service, the two companies set about negotiating what appeared to be the straightforward sale of Comcast's remaining 30% stake of Hulu to Disney.
That followed reports from the summer of 2021 that Comcast had stopped funding Hulu as it engaged in arbitration with Disney over the streaming service.
As most of us are aware by now, starting in 2024, Comcast can demand that Disney buy out the remaining 30% of Hulu it doesn't own at a market value of no less than $27 billion.
Now, with the January 2024 trigger date for such a sale much closer, we seem to know less about what's going to happen to Hulu than ever.
During Disney's fiscal Q1 earnings call last week, newly reinstalled CEO Bob Iger was hardly committal, indicating that Disney might even sell Hulu.
Comcast CEO Brian Roberts, meanwhile, indicated a surprising willingness earlier last year to maybe even buy Hulu back from Disney. But Comcast didn't make any definitive statements about such a move during its Q4 call, either, and seems to have even "walked back" from this position, Nathanson said.
The analyst said such a move would be foolish in that it would strip Hulu from the Disney/FX content pipeline that underpins the service.
Without that content source, Hulu would be a relatively worthless brand, he contends.
That we don't get.
Transitioning from a joint venture between Disney, NBCUniversal Fox and Warner Bros. to a stepchild platform controlled and primarily programmed by Disney, Hulu has been stripped of content pipelines before.
And it keeps on growing.
Hulu added 800,000 customers in the final quarter of 2022 and now has 48 million subscribers. Its 2.7 million customer additions far outpaced Netflix, which lost subscribers in the U.S. and Canada last year.
This has come even as Disney has limited Hulu's international expansion, seemingly to ensure that that market valuation of the service doesn't surpass $27 billion next year.
Hulu's growth also came as the leader of the Disney Bundle, Disney Plus, grew only by 200,000 paid users from October through December.
An enduring subscription streaming brand tied to nearly 50 million subscribers is potentially available for acquisition ... at a time when the vast allocation for building such scale from scratch is decidely frowned upon by the finance community?
Yeah, let the speculation begin.
