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Should Comcast Sell Its Stake in Hulu to Disney?

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Hulu’s ownership

Hulu has been changing hands amid rising consolidation in the media industry due to cord-cutting and the growing popularity of online video streaming services provided by established players such as Netflix (NFLX) and Amazon (AMZN).

Hulu was jointly owned by Walt Disney (DIS), 21st Century Fox, Comcast’s (CMCSA) NBCUniversal, and Time Warner, which was then acquired by AT&T (T) in June 2018. Disney had a 30% stake in Hulu, which was doubled to 60% after the acquisition of assets of 21st Century Fox, including a 30% stake in Hulu. On Monday, AT&T’s WarnerMedia also sold its minority stake of 10% in Hulu, leaving Comcast and Disney as the owners of Hulu. However, AT&T could continue to be Hulu’s “valued partner” in delivering content.

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Comcast and Hulu

If speculations are correct, then Comcast might sell its ~30% stake in Hulu, as Disney has already acquired a controlling stake in Hulu to fight streaming giants. Hulu’s sell-off would also make sense, as it could help Comcast to reduce its debt burden, which it gained after the acquisition of London-based Sky in October 2018, and due to higher investments for its video streaming service.

Comcast’s NBCUniversal is launching its new video streaming service in the first quarter of 2020 amid declining pay-TV subscribers and fighting with digital rivals. Comcast lost 19,000 residential video customers in Q4 2018.

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