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Comcast and Disney’s Legal Battle Over Hulu Could Lead to Courtroom Showdown

Disney and Comcast have been in negotiations over the final price for full control of Hulu. The two companies are struggling to reach an agreement on the valuation of the streaming service. While Comcast is pushing for a higher price, Disney is aiming to stick closer to the original valuation of Hulu. The situation has escalated to the point where legal action may be on the horizon as both sides dig in their heels.

Last year, Disney revealed in an SEC filing that they and Comcast will enlist the help of external investment banking firms to determine a sale price. These firms will conduct valuations that will ultimately set the final sale price for Disney to acquire Comcast’s stake in Hulu. If the valuations provided by the two firms differ by more than 10%, a third firm will be brought in to establish its own valuation. The final sale price will be an average of the two estimates that are closest in value to each other.

The appraisal process will take various factors into consideration, including Hulu’s financial performance, its future prospects, and the assets provided by Disney that are crucial to Hulu’s operations. Despite these efforts, Disney and Comcast have yet to find common ground on the valuation of Hulu. Reports indicate that the two companies are seeking an advisor to help resolve this issue, with the possibility of a court battle looming.

Five years ago, the companies had agreed on a valuation of $27.5 billion for Hulu. However, Comcast’s CEO, Brian Roberts, stated at a recent investor conference that Hulu is now significantly more valuable. While Comcast is aiming for a higher valuation, Disney is leaning towards maintaining the $27.5 billion mark. JPMorgan, hired by Disney, aligns with the initial valuation, while Morgan Stanley values Hulu at over $40 billion in Comcast’s assessment.

Both sides are now considering turning to a third party to settle the valuation dispute. The involvement of an external mediator raises questions about whether a resolution acceptable to both Disney and Comcast can be reached without resorting to legal action. The uncertainty surrounding the final price for Hulu underscores the complexity of the negotiations between the two media giants.

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