Back in 2023, entertainment giant Disney reached an agreement to acquire media conglomerate Comcast’s 33% stake in streaming service Hulu. However, the deal has yet to be closed, and it could end up costing Disney $5 billion more to get there.
Disney already paid Comcast $8.6 billion for its Hulu stake on the basis of the ground floor value of $27.5 billion, as determined by their previous agreement from 2019. However, the companies are currently engaged in a dispute over the streamer’s true market value.
Disney’s adviser, JPMorgan, valued Hulu below $27.5 billion, while Morgan Stanley, which advised Comcast, came up with a $40.8 billion valuation.
In order to resolve the issue, the two sides have recently hired investment bank RBC Capital to make an independent appraisal of Hulu’s value and resolve the dispute.
According to Disney, if RBC Capital evaluates Hulu at $27.5 billion or below, the company would not be on the hook for any further payments to Comcast. However, if the arbitrator leans towards Comcast’s valuation, Disney would have to pay up to $5 billion on top of the $8.6 billion it already handed over.
RBC Capital is expected to make its final decision during the fiscal 2025.