Disney ‘open minded’ about potential Hulu sale, Peltz drops proxy fight

Biographical drama miniseries Pam & Tommy

Returning Disney CEO Bob Iger says the company is “open minded” about potentially selling its two-third stake in Hulu.

Disney currently owns 67% of the US streaming service, while Comcast owns the remaining 33%. Under a “put/call” agreement signed in 2019, Disney has the option to acquire Comcast’s stake in Hulu as early as January 2024 for a “fair market value at that future time.”

Bob Iger

Speaking on US business news channel CNBC, Iger said: “Everything is on the table right now. I’m not going to speculate about whether we’re a buyer or seller of [Hulu]. I’ve obviously suggested that I’m concerned [about] undifferentiated general entertainment, particularly in the competitive landscape we’re operating in, and we’re going to look at it very objectively.”

Iger’s comments come a day after a bombshell first-quarter earnings call in which he announced Disney would be making around 7,000 job cuts and is looking to find US$5.5bn across its business over the next few years, including US$3bn related to non-sports content.

During the call, Iger specified that Disney was not looking to get out of general entertainment, which is a focal point for Hulu and has become an increasingly key part of the Disney+ offering. Rather, the exec said Disney would look to “aggressively curate” its general entertainment content.

Ever since the put/call agreement was signed in 2019, Disney buying out Comcast’s stake in the streamer behind series such as Pam & Tommy, The Handmaid’s Tale and Dopesick has been viewed as the most likely scenario. However, as the January 2024 deadline moves closer, that assumption has been challenged, with Comcast CEO Brian Roberts saying his company would also be “interested” in buying out Disney.

Meanwhile, in December, NBCUniversal CEO Jeff Shell said “there’s no indication that anything else is going to happen than Disney writing us a big cheque for the asset in [2024].”

Iger concluded by saying that he “will be open minded” to various scenarios.

Elsewhere, activist investor Nelson Peltz has ended his proxy battle with Disney following the company’s announcement of a sweeping restructure and cost-cutting measures.

“This was a great win for all the shareholders,” said billionaire investor Peltz, who is the founder of US-based asset management firm Trian Group, also during an appearance on CNBC. “Management at Disney now plans to do everything that we wanted them to do.”

The decision to abandon the proxy battle comes a month after Peltz first announced his intention to mount a bid to gain a seat on Disney’s board of directors.

At the time, Peltz contended that Disney had: made questionable M&A moves, including overpaying for Fox; demonstrated a lack of overall cost discipline; implemented a flawed direct-to-consumer strategy; and lacked direction in terms of succession planning.

“We believe that the company’s current problems are primarily self-inflicted and need to be addressed immediately,” said a Securities and Exchange Commission filing from Peltz, who owns around 9.4 million shares in Disney, equating to roughly a US$900m stake.

Disney’s board of directors fired back, claiming Peltz “does not understand Disney’s businesses and lacks the skills and experience to assist the board in delivering shareholder value in a rapidly shifting media ecosystem.”