Bob Iger has been back at Disney for just a few months, but we’re already seeing some big changes.

Recently, Iger announced a massive restructuring at the Company, discussed how Disney’s theme park pricing was “alienating” some and how they’re taking steps to change that, and also made comments about Disney managing capacity to shift the mix away from Annual Passholders. So what’s next? Well, it looks like big changes could be on the way when it comes to Disney’s streaming service and Hulu.

We’ve taken a DEEP dive at the battle Disney must fight to acquire Hulu, but it looks like Iger may be reconsidering that battle. By way of background, Disney already owns 67% of Hulu, and Comcast’s NBCUniversal owns the remaining amount.

According to Yahoo, under the deal made back in 2019, Disney got “full operational control” of Hulu. And, as early as January 2024, “Comcast can require Disney to buy NBCUniversal’s interest in Hulu and Disney can require NBCUniversal to sell that interest to Disney for its fair market value at that future time.”

Basically, Disney could require Comcast to sell their interest in 2024, and many expected that Disney would do that or would potentially try to make that purchase sooner. Buying Hulu FAST appeared to be on Bob Chapek’s radar when he was CEO, as he once told CNBC that he’d love to own Comcast’s 33% stake in Hulu “tomorrow.” Chapek shared, “I would like nothing more than to come up with that solution for an early agreement.”

Iger also previously seemed to really value Hulu. Back in 2019, when Disney made the deal to get full operational control of Hulu, Iger (who was still CEO of Disney) shared that “Hulu represents the best of television, with its incredible array of award-winning original content, rich library of popular series and movies, and live TV offerings.”

One insider cited by Deadline seemed to think that the deal was likely — “Iger likes deals, and he loves acquisitions, so it is only a matter of time for the next one, just watch.”

But now it seems like things may have changed, or at least Disney’s attitude toward acquiring the rest of Hulu has changed. In an interview, CNBC’s David Faber pointed out that in 2024 Disney could get hit with a BIG bill to acquire Comcast’s remaining interest in Hulu. Iger shared that Disney is intent on reducing its debt over time.

And he noted that he has some concerns about undifferentiated general entertainment given the current competitive landscape. Though Iger pointed out that Hulu is a successful platform and a “good consumer proposition,” “everything is on the table right now.” 

Iger insisted that he would not speculate whether Disney would be a buyer or seller when it comes to Hulu, but he said that they would be looking at things very objectively and Disney is currently open-minded about it all.

David Faber pointed out that the “assumption has been that [Disney] will buy what you don’t already own of Hulu.” To which Iger responded, “I think I’m suggesting that may not necessarily be the case.”

.@Disney CEO Bob Iger discusses @hulu with @davidfaber, telling him that "everything is on the table."@davidfaber: I think the assumption has been that you will buy what you don't already own of Hulu.
Iger: I think I'm suggesting that may not necessarily be the case.$DIS pic.twitter.com/fVFAnwdvDI

— Squawk on the Street (@SquawkStreet) February 9, 2023

 

While this marks a big shift from some other opinions Disney has shared on the Hulu situation, it may mark a step in the right direction for some investors. Tom Rogers, Executive Chairman at Engine Media, opined that Hulu is a “significant issue” for the Company. For him, the dream scenario would be for the two companies to make Hulu a bigger deal and build it out together, rather than a buyout. But if that can’t happen, Rogers shared that he has come to believe that “Disney is stronger without Hulu than with Hulu.”

Rogers noted that the situation gets complicated since some of the subscriptions at issue would be those that are already bundled with Disney+. But he said, “You have to ask, what does Hulu do for them that they cannot do with Disney+?” If Disney keeps things like the FOX library and FX, “Why couldn’t they build out Disney+ into a broader general entertainment kids and family service?” Rogers noted that this is essentially what’s happening internationally with Disney+ and Star.

"Disney is stronger without Hulu than with Hulu," says @EngineMedia Executive Chairman Tom Rogers. "You have to ask, what does Hulu do for them that they cannot do with Disney+? Why couldn't they build out Disney+ into a broader general entertainment kids and family service?" pic.twitter.com/gyqbHnC42P

— Squawk Box (@SquawkCNBC) February 9, 2023

 

Michael Nathanson from Moffett Nathanson also felt that Iger’s comments were promising. Nathanson said the best outcome would be to recreate the joint venture they had with Comcast and potentially change the structure of Hulu.

He noted that, as Iger seemed to indicate, you don’t really want to compete long-term in general entertainment because it is too competitive and there’s not enough differentiation. So, to him, this appeared to mark a step in the right direction.

.@MoffettNathanso’s Michael Nathanson reacts to @RobertIger's comments on @Disney's stake in Hulu.

Nathanson doesn’t think there’s a “natural buy” for Hulu, but notes “the best outcome would be to recreate the joint venture [Disney] had with Comcast.” $DIS $CMCSA pic.twitter.com/HspEfMHmbP

— Squawk on the Street (@SquawkStreet) February 9, 2023

 

Interestingly, Nelson Peltz, who recently ended the proxy battle at Disney, felt a bit differently previously. He shared that, in his opinion, Disney either needed to buy Hulu or just get out of the streaming business. (CNBC) But perhaps this middle ground of getting out of the Hulu world and just sticking to Disney+ could still appease him.

CNBC calls Iger’s viewpoint a “stark reversal in strategy for the company.” Chapek previously had held a conversation with Comcast CEO Brian Roberts about Hulu, but CNBC notes that “Comcast executives walked away from those discussions resigned to taking Disney’s money in 2024 rather than gaining full ownership of Hulu.” It seems that may be changing now.

According to CNBC, “When Iger acquired the majority of Fox’s assets for $71 billion in 2019, one of his primary motivating factors was to make sure Comcast didn’t acquire a majority stake in Hulu.” Comcast CEO Roberts actually “made a hostile bid to acquire Disney for $54 billion in 2004,” and an NBCUniversal CEO left Disney to work for Roberts in 1998. But Roberts and Iger reportedly still have a strong “working relationship.”

And they’ll need that relationship if any kind of deal is going to be ironed out when it comes to Hulu, especially when it comes to finding a fair market value if Disney does decide to buy out Comcast’s interest.

Will Disney put its interest in Hulu for sale? Will it find some kind of middle ground with Comcast and NBCUniversal? How could this change the content we see on Disney+ or the number of subscribers at Disney+? Much remains to be seen.

Remember that the critical Hulu date isn’t until 2024, so we’ve got some time, but we’ll be keeping an eye out for updates.

See more about Disney’s recent news bombs here!

How do you think Iger should handle the Hulu situation? Tell us in the comments.