Dow Jones entertainment giant Disney announced late Wednesday plans to purchase the remaining outstanding stake in the Hulu streaming service held by NBC Universal. Disney also revealed the official launch date for its new online sportsbook. DIS stock and CMCSA stock added to their Thursday gains on Friday. PENN stock jumped on the sports betting news.
Disney will acquire the remaining 33% stake in Hulu from Comcast-owned NBC Universal. The House of Mouse expects to pay NBCU about $8.61 billion by Dec. 1, based on the terms of an options agreement between the two companies from 2019. The figure represents NBC Universal's percentage of the $27.5 billion guaranteed floor value set for Hulu in the 2019 agreement.
Under the agreement, the companies will reassess Hulu's value as of Sept. 30. If it is greater than the guaranteed floor value, Disney will pay NBCU the percentage of the difference.
Disney noted the timing of the appraisal process is uncertain but it expects the deal to close in the 2024 calendar year.
The Dow Jones entertainment powerhouse offers the Disney+, Hulu and ESPN+ streaming services, with bundle options and ad-free tier plans. Disney hiked the prices for its streaming services for the second time this year on Oct. 12, a move that was first announced during Q3 earnings in August.
The price of ad-free Disney+ increased to $13.99 per month, while Hulu and ESPN+ subscriptions increased to $17.99 per month and $10.99 per month, respectively.
Disney is also exploring ways to crack down on account sharing. Later this year, the company will update its terms and roll out a new sharing policy in 2024.
ESPN BET To Go Live
Disney announced plans early Thursday to launch its ESPN BET online sportsbook across 17 states in the U.S. on Nov. 14. Subject to final approvals, ESPN BET will go live in Arizona, Colorado, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maryland, Massachusetts, Michigan, New Jersey, Ohio, Pennsylvania, Tennessee, and the Virginias.
Additionally, ESPN is now using official odds provided by ESPN BET across its editorial and other content. And ESPN's Daily Wager program will rebrand to ESPN BET Live, starting Nov. 10.
ESPN partnered with Penn Entertainment on a gambling sportsbook in August. Under the deal, Penn Entertainment rebranded its Barstool Sportsbook as ESPN Bet. Meanwhile, ESPN will use ESPN BET exclusively. And Penn will pay ESPN $1.5 billion cash over 10 years, plus $500 million in warrants to buy PENN stock. In return, Penn will have exclusive rights to the ESPN BET trademark in the U.S. for the next decade.
Disney Stock
Disney stock added another 2.1% Friday after swinging 2.7% higher Thursday. Shares have been in a steady downtrend this year as earnings declined the past four quarters. Disney is also implementing a major restructuring plan to cut $5.5 billion in costs.
Disney stock is down 2.1% in 2023 and trading near its lowest level since March 2020.
CMCSA stock rose 1.6% during trade Friday, matching its advance from Thursday.
PENN stock climbed 1.7% Friday after spiking nearly 14% Thursday.
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