Hulu is now officially part of the Magic Kingdom.
Walt Disney has inked a wide-ranging deal with Hulu partner Comcast to take over operational control of the popular streaming video service known for “The Handmaid’s Tale” and reruns of hit shows like “Seinfeld” and “South Park.”
Under the deal announced Tuesday, Comcast will give up three seats on Hulu’s board and retains the right to demand Disney buy its 33 percent stake in the streaming service in five years.
Disney, meanwhile, has guaranteed that Hulu’s equity value at the time of any sale will be at least $27.5 billion — valuing Comcast’s Hulu stake at roughly $9 billion.
Last month, AT&T sold its 9.5 percent stake back to Hulu in a deal that valued the streaming video service at $15 billion.
The deal further solidifies Disney as an growing threat to streaming giants Netflix and Amazon, as well as tech giant Apple, which is in the process of developing its own streaming app.
Last month, the company’s stock soared after it unveiled its new Disney+ streaming service, which it plans to launch later this year. That service will include Disney’s more family friendly content, including classic Disney films like “The Little Mermaid,” as well as Pixar and Marvel blockbusters like the “Avengers” series and the “Star Wars” franchise.
Disney will use Hulu for its more adult content, the company said, including its newly purchased Twenty-First Century Fox TV and film assets. The $71 billion deal gives Disney access to edgy content from FX, including “American Horror Story” and “The Americans,” which will also go on Hulu.
“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,” Disney Chairman and Chief Executive Officer Bob Iger said in a statement announcing the deal.
Iger has been focused on building Disney’s streaming business as consumers increasingly cut their ties to cable. Some 235.1 million Americans will stream their TV and movie content this year, according to research firm eMarketer. That compares with estimates for 287.4 million TV viewers in the US this year, the firm said.
Netflix is on target to capture nearly 35.2 percent of US streaming subscribers, while Hulu is on pace to corral 63.9 million users, eMarketer said.
Comcast, which owns NBCUniversal, provides its NBC content to Hulu in a deal that expires in three years. Comcast would need to decide at that point whether to extend the deal or keep its hit shows, like “Seinfeld,” for its own yet-to-be-named streaming service.
NBCUniversal CEO Steve Burke called the deal “a perfect outcome for us,” as it extends the company’s lucrative content licensing agreement with Hulu, while giving it “maximum flexibility to program and distribute to our own direct-to-consumer platform.”