Disney’s Iger Would Consider Selling Hulu Stake: ‘Everything Is on the Table’

The CEO questioned whether “general entertainment” has a place in Disney’s future

Will Iger's Disney buy Hulu?
Disney CEO Bob Iger has suggested that the future of the hybrid subscription/ad-supported streamer remains in the hands of rival Comcast (Getty Images)

Disney CEO Bob Iger on Thursday suggested the entertainment giant might sell off its stake in Hulu despite the streaming service’s overall success.

“Everything’s on the table right now,” Iger told CNBC’s David Faber the morning after the recently returned CEO announced $5.5 billion in cost cutting at the company, which includes slashing 7,000 jobs.

Iger called Hulu, whose hits like “Only Murders in the Building” and “The Handmaid’s Tale” are largely adult-oriented, a “very successful platform” but demurred when he was asked about the potential $9 billion bill coming next year, should Comcast’s NBCUniversal try to sell its 33% stake in the hybrid subscription/ad supported streamer.

Under a 2019 agreement, Disney can buy out rival Comcast’s remaining 33% stake in Hulu as early as January 2024, and Comcast can require that Disney do so.

NBCUniversal CEO Jeff Shell said in December that he expects Disney to write a “big check” to obtain complete ownership of Hulu.

“We think it’s worth a lot of money because it’s sold on a full-control basis, as if you were auctioning it off,” Shell said. “And I think there’s no indication that anything else is going to happen than Disney writing us a big check for the asset in ‘24.”

But Iger took a step back on the prospects of buying out NBCUniversal’s share.

“We’re not prepared to give any forward statements in that regard,” Iger said. “So I’m not gonna speculate about whether we’re a buyer or seller of it.”

He noted that the company is not worried about the debt it is carrying at the moment.

But Iger raised the possibility that Hulu’s model is not part of Disney’s future.

“I’ve talked about general entertainment being undifferentiated.” That adult-focused market is an area where Iger said he is “concerned,” he said, “particularly in the competitive landscape that we’re operating in.”

The chief executive, who returned to Disney in November after his chosen successor, Bob Chapek, washed out, said the company will take a “very objective” look at Hulu before making any decisions.

Chapek in September, before he was ousted, had expressed interest in buying the remainder of Hulu. “We would love to get to the end point earlier, but that obviously takes some level of propensity for the other party to have reasonable terms for us to get there,” Chapek said at the time. “And if we could get there, I would be more than happy to try to facilitate that.”

Comcast CEO Brian Roberts also expressed interest in buying out Disney at the same conference. “I believe if it was for sale, put up for sale, Comcast would be interested, and so would a lot of other tech and media companies.”

Iger also discussed Disney’s sports broadcasting plans, and acknowledged that the model “ultimately will change” to make ESPN a streaming service.

“If you do the math, there’s an inevitability to it,” he said, “But I can’t say when.”

“The streaming model will be a phenomenal product for the sports fan,” Iger said, but acknowledged that pricing of such a service, which would come with extremely high costs for airing live sports, is “something we have to look at very carefully.”

Disney’s results, along with Iger’s comments and news that activist investor Nelson Peltz dropped his proxy fight following the quarterly report, helped life Disney shares by $2.53, or 2.3%, to $114.31 in late morning trading.