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Comcast executives count on Disney to purchase remaining stake in Hulu

Bed Bath & Beyond's turnaround isn't enough to fix its ailing business, analysts say

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Hulu’s future remains an open question, as Comcast and Disney have still not agreed on terms governing future ownership of the company.

But Comcast executives plan to have Disney buy them out — even though they’d prefer otherwise.

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CNBC ProBed Bath & Beyond’s turnaround isn’t enough to fix its ailing business, analysts say

Disney owns two-thirds of Hulu and has an option to buy the remaining 33% from Comcast as early as January 2024. Some analysts and industry watchers have speculated that Comcast could be looking to buy Hulu from Disney, rather than the other way around. Comcast Chief Executive Brian Roberts is a long-time believer in Hulu and has pushed in the past to keep the asset rather than sell it, including in 2013 when Roberts paused talks with DirecTV, according to people familiar with the matter .

Comcast raised the idea of ​​buying Hulu outright from Disney after Disney agreed to acquire the majority of Fox’s assets in a $71 billion deal that closed in early 2019, two of the people behind the deal said asked not to be named because the discussions were private. Disney, which was armed after acquiring Fox’s 66% minority stake in Hulu, scrapped the idea, people said.

Comcast was stymied from buying Hulu outright, and Comcast’s continued belief in the deal led to the unusual deal the two companies reached in May 2019. Comcast agreed to sell Disney its minority stake as early as 2024. As part of this transaction, Disney guaranteed a sale price that values ​​Hulu at a minimum of $27.5 billion.

That amount rose sharply early in the pandemic, giving Comcast hope that Disney might choose to offload Hulu rather than pay Comcast a huge check for the remainder, two of the people said. The Hulu spin-off would have allowed Disney to focus its focus and money primarily on Disney+.

“I think if Disney could turn back the clock today, I’m not sure they would make that deal,” said Neil Begley, an analyst at Moody’s Investors Services. “Disney has to pay this huge bill in 2024, at a time when they’re already putting a lot of money into Disney+.”

Disney’s acquisition of Hulu would also accelerate Comcast’s streaming efforts. Hulu would immediately become Comcast’s flagship streaming asset, replacing NBCUniversal’s Peacock, which has added just 13 million paying subscribers in its nearly two years of existence. Hulu has 46.2 million subscribers. Peacock could live on as a free ad-supported option from NBCUniversal. Peacock already has a free tier with millions of users.

Several senior Comcast executives also think that Hulu doesn’t make as much sense in connection with Disney’s assets as it does with NBCUniversal, especially given the recent announcement that Disney+ plans to launch an ad-supported tier in December, according to those familiar with the matter Persons. Hulu has been Disney’s ad-supported service for years. Disney could have positioned Hulu as an advertising medium for the future, but CEO Bob Chapek has chosen to create both commercial and non-commercial versions of Disney+ and Hulu.

Disney and Comcast spokespeople declined to comment.

Bob Chapek, CEO of The Walt Disney Company and former head of Walt Disney Parks and Experiences, speaks during a media preview of the 2019 D23 Expo in Anaheim, California August 22, 2019.

Patrick T Fallon | Bloomberg via Getty Images

Why Disney wants Hulu

Netflix’s slowing growth this year has led to a broader devaluation of the streaming sector. Comcast executives value Hulu “significantly higher” than $27.5 billion and possibly as high as $50 billion, one of the people said. That’s less than about $60 billion during the pandemic, the person said. If Disney sticks with its plan to buy Comcast by January 2024, there’s still time for significant valuation swings.

Disney’s decision to lower Disney+’s 2024 projections and subsequent move to raise prices signaled to Wall Street that Chapek was no longer focused on adding subscribers at any cost.

It’s sent a signal to Comcast that Hulu is likely in Disney’s long-term plans. Excluding Hulu with Live TV, Hulu’s average revenue per user is $12.92 per month. That’s almost triple Disney+’s global ARPU of $4.35 and more than double Disney+’s ARPU in the US and Canada ($6.27).

Disney has built a streaming strategy around bundling Disney+, Hulu, and ESPN+. While Disney increased the price of Disney+ by 38% and the price of ESPN+ by 43%, it increased its bundled offering of Disney+, Hulu (with ads) and ESPN+ by just $1, from $13.99 to $14. $99. That suggests Disney’s preferred option is for customers to pay for the entire package, including Hulu.

Media and entertainment companies have begun to focus on building profitable subscribers rather than simply adding subscribers in recent months as industry-wide streaming growth has slowed. If Disney doesn’t bank on Disney+’s growth, Hulu will become a more important part of its long-term strategy.

“People are becoming more sensible about their spending,” Kevin Mayer, Disney’s former streaming boss, said on CNBC last month. “Wall Street is once again emphasizing not only topline subscriber count, but bottom line as well. I think that’s healthy.”

Comcast vs Disney

There is also the problem of competitive dynamics. One of the main reasons Disney stuck with Hulu and acquired other Fox assets was to keep them off Comcast, according to people familiar with the matter. Handing Hulu over to Comcast would shift the balance of power in the media world and weaken Disney, thought then-CEO Bob Iger, People said.

Comcast has already taken steps to weaken Hulu on the assumption Disney will keep it. Earlier this year, Comcast made the decision to remove content like “Saturday Night Live” and “The Voice” from the streaming service and put it on Peacock instead. This change will take place later this month.

Comcast has already earmarked a portion of the proceeds to pay down debt. Comcast executives say they don’t need the money and aren’t independently trying to accelerate a schedule, two of the people said.

And Loeb’s desire

Daniel Loeb

Simon Dawson | Bloomberg | Getty Images

Activist investor Dan Loeb’s Third Point Capital bought a new stake in Disney last month, arguing that Disney should not only finalize its deal for Hulu but also speed up its timing.

“We urge the company to make every attempt to acquire Comcast’s remaining minority interest before the contract expires in early 2024,” Loeb said in a letter to Chapek. “We believe it would be wise for Disney to even pay a modest premium to expedite the integration, however we recognize that the seller may have an inappropriate price expectation at this point (noting that the seller already has the made the decision to prematurely remove its own content from the platform.) We know this is a priority for you and hope to reach an agreement before Comcast is contractually committed to this in approximately 18 months.”

According to people familiar with the matter, Disney has not publicly addressed the specifics of Loeb’s inquiries and has not made a decision on whether it plans to accelerate its timeline to purchase Comcast’s stake in Hulu.

Disclosure: Comcast is the parent company of NBCUniversal, which owns CNBC.

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Health

UK lifts all remaining Covid restrictions regardless of instances surging

UK lifts all remaining Covid restrictions despite cases surging

Two people embrace in the middle of the dance floor at Egg London nightclub in the early hours of July 19, 2021 in London, England. Starting Monday July 19 at 12:01 p.m., England will lift most of its remaining social restrictions from Covid-19, including wearing masks indoors and restrictions on group gatherings.

Rob Pinney | Getty Images News | Getty Images

LONDON – England is taking a step into the unknown on Monday, lifting almost all remaining restrictions on public life at a time when coronavirus infections are high and rising.

As of Monday, there will no longer be any restrictions on indoor gatherings. Nightclubs can reopen, the 1-meter social distancing rule will be lifted, and face masks will be largely voluntary, although some airlines and transport companies have announced that they will retain mask requirements.

In essence, most of the legal restrictions have now been lifted and replaced with an emphasis on ownership as infections continue to rise.

There was no mention of “Freedom Day,” as the Monday, July 19, earlier, when Prime Minister Boris Johnson urged caution as the country moved to “Step 4” of its roadmap to lift restrictions.

“Please, please, please be careful. Take the next step tomorrow with the right care and respect for other people and the risks that the disease continues to pose,” Johnson said in a statement released on Sunday evening Downing Street was released.

The lifting of restrictions had already been postponed from June 21st to allow more vaccinations amid a surge in cases caused by the spread of the highly contagious Delta variant.

The number of cases remains high across the UK with 316,691 reported cases in the past seven days, an increase of around 43% over the previous seven day period. Hospital admissions are low but insidiously higher, with 4,313 people hospitalized in the past seven days, government data shows. 283 people have died in the past seven days.

The vast majority of infections currently affect younger age groups who are not yet or only partially vaccinated. Recent events such as the 2020 European Football Championship, which saw England fans gathering in pubs and bars across the country, have also been blamed for the rise in cases.

At the same time, the government is pushing ahead with vaccinations. To date, 87.9% of UK adults have received a first dose of a vaccine and 68.3% of UK adults have received both doses. Taking both doses of a vaccine greatly reduces the risk of infection and hospitalization from the coronavirus.

Continue reading: A headache? Runny nose? According to the study, these are among the new top 5 Covid symptoms

However, experts warn that hospital admissions could increase significantly in the coming weeks, and scientists have criticized plans to relax almost all Covid-19 restrictions, calling it unethical and dangerous for the entire planet.

Others have defended the move, saying that staying incarcerated has many harmful consequences, from the economic and livelihood effects to mental health.

In a statement on Sunday evening, the UK government admitted that cases continued to rise, but noted that the link to hospital admissions and deaths from the vaccination program had been “significantly weakened” as all adults were asked to come forward for both doses of the vaccine.

Watch the world

Analysts say the world will be watching Britain with interest to see what happens.

Deutsche Bank research strategist Jim Reid stated Monday that “the world will be watching the British experiment with great interest. It could show a way back to normal or warn even heavily vaccinated countries that Covid will be a problem for a decent time. “

“Before that symbolic day, new cases in the UK fell below 50,000 after two days yesterday (Sunday). However, the weekly growth rate is still strong. When you break down the numbers, the largest area of ​​growth over this period was men ages 15 to 40. It is the first time in the pandemic that there has been any notable gender segregation. It strongly suggests the impact of the millions of soccer fans watching the European Championship soccer final in various locations across the country. “

Continue reading: Wearing masks becomes a new battlefield in England as Covid rules are relaxed

Kallum Pickering, senior economist at Berenberg Bank, told CNBC on Monday that the economic impact of the reopening was uncertain as consumer behavior could be affected by the reopening, with some consumers more nervous about the lifting of restrictions like wearing masks .

“I doubt we will see any recovery, but I think we will see continued growth in economic activity … but some of those uncertainties are certainly great. We need to look at some of the high-frequency data, ”mobility statistics, and the like, to see what the real impact of the uncertainty of opening and removing masks is actually keeping people away from the high street and into restaurants and supermarkets go, “he told CNBC’s Squawk Box Europe.

Government defends reopening

Johnson, who is self-isolating after coming into contact with Health Secretary Sajid Javid, who is ill with Covid, defended the reopening on Monday.

“If we don’t do it now, we have to wonder when are we ever going to do it? This is the right moment,” Johnson said in a video statement.

“But we have to do it carefully. We have to remember that unfortunately this virus is still out there. The cases are increasing, we can see the extreme contagiousness of the Delta variant.”

Johnson said there was “immense comfort and satisfaction” that Covid vaccines “have severely weakened the link between infection and hospitalization, and between infection and serious illness and death.”

Continue reading: The Covid Delta variant “exploded” in Great Britain – and could be a blueprint for the USA

The government said it would continue to review all data. It said it will “strengthen vaccine defense” by shortening the dosing interval of Covid vaccines for all adults from 12 to 8 weeks, continuing to use its testing, tracking and isolation system, and maintaining border controls, including quarantine for all travel from a country on the red list and for countries on the yellow list, unless persons are double vaccinated.

“The data is continuously evaluated and contingency measures are maintained during times of higher risk if necessary, but restrictions are avoided where possible,” the government said.

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Health

Florida governor DeSantis suspends all remaining Covid restrictions

Florida governor DeSantis suspends all remaining Covid restrictions

Florida Governor Ron DeSantis speaks wearing his face mask about the rise in coronavirus cases in the state during a press conference at Jackson Memorial Hospital in Miami on July 13, 2020.

Chandan Khanna | AFP | Getty Images

WASHINGTON – Florida Governor Ron DeSantis signed an executive order on Monday suspending immediately all pending local Covid-19 emergency orders and related public health restrictions.

“The fact is that we are no longer in a state of emergency,” DeSantis said during a press conference. He conceded that Florida was not finished with its fight against the coronavirus, but reiterated the nation’s decline in Covid-19 cases and deaths.

“I think that’s the evidence-based thing,” DeSantis said, adding that asking vaccinated people to continue wearing masks would undermine confidence in the coronavirus vaccine.

Private businesses may still require masks and enforce social distancing and other protective measures.

DeSantis signed a draft law on Monday that will bring the implementing regulation into effect on July 1st. The implementing regulation is designed to close the gap by then. The move, which is effectively ending all local restrictions related to pandemics, also bans vaccination certificates.

Florida has reported the third most common Covid-19 cases in the US with more than 2.2 million since the pandemic began and the fourth highest death toll with more than 35,000 deaths, according to Johns Hopkins University. However, the average number of new cases there has dropped more than 13% in the past week and dropped to 4,885 according to data on Sunday.

The White House did not immediately respond to CNBC’s request for comment.

Last week, the Biden government announced a relaxation of federal health guidelines on wearing masks outdoors.

The Centers for Disease Control and Prevention recommend that fully vaccinated individuals can exercise outdoors and attend small gatherings without a face mask. The agency also recommends that fully vaccinated individuals wear a mask in crowded outdoor areas.