According to Tuesday's Disney-Hulu press release, Comcast also agreed to extend the Hulu license of NBCUniversal programming through 2024, but NBCU can terminate most of its content licensing agreements with Hulu in three years.
However, the agreement also states that NBCUniversal will be able to run certain content on its own streaming service within one year's time in exchange for a reduced licensing fee for Hulu. In return, Hulu Live can continue to enjoy access to NBCUniversal channels until 2024 and Hulu will continue to be offered through Comcast's Xfinity X1 platform.
Disney, which is due to launch its own streaming service, Disney+, in the USA in November, owns 67% of the streamer having been a founding partner in the business more than a decade ago.
Interested in Disney? Add Disney as an interest to stay up to date on the latest Disney news, video, and analysis from ABC News. It's a free service and therefore will rely on ad-supported content to generate a profit. But, during Disney's Investor Day briefing of Disney+ and its post-Fox plans, Kevin Mayer, chairman of the direct-to-consumer division, said the company is "likely" the company will be bundling together Hulu, ESPN+, and Disney+ for "a discounted price". In November 2018 Disney said in a regulatory filing that Hulu was worth about $9.3 billion, but AT&T's recent sale of its Hulu stake raised the company's implied valuation to $15 billion. Landgraf said he used to wish FX was its own stand-alone premium service.
Disney has already made clear that Hulu will be a critical part of its streaming strategy. The service now has 28 million subscribers (26.8 million paid memberships and 1.3 promotional accounts).
Disney's deal with Comcast isn't surprising.
Comcast will have the option but not the obligation to fund its proportionate share of Hulu's future capital calls and will be diluted if it elects not to fund. Disney has agreed that only $1.5 billion of any year's capital calls can be funded through further equity investments with any capital in excess of that annual amount being funded by non-diluting debt.