Disney CEO Bob Chapek wants to wrap-up a deal for Hulu, but Comcast boss Brian Roberts said the price is rising.
Walt Disney (DIS) – Get The Walt Disney Company Report shares edged higher Thursday following an upbeat address to investors from CEO Bob Chapek at a tech and media sector conference late Wednesday in San Francisco.
During a question-and-answer session at the Goldman Sachs Communacopia + Technology conference, Chapek said he sees “strong” consumer demand for the group’s parks business in the coming year, with a rebound in visitors to international parks already underway after two years of pandemic restrictions.
He also reiterated the media group’s view that the ESPN sports network is best-placed within the broader Disney company, following a brief few weeks of pressure from activists investor Dan Loeb to consider spinning it off. He also noted the potential for sports betting on the revenue and earnings potential for ESPN in the coming years.
Chapek’s comments echoed those made last week during a Disney Expo event, where he insisted that ESPN remains “critical” to his overall media strategy despite receiving more than a hundred enquiries from companies and investors looking to buy it.
Another request from Loeb, that Disney accelerate the timing of its agreement to purchase the 33% stake in streaming service Hulu owned by Comcast (CMCSA) – Get Comcast Corporation Class A Common Stock Report was also addressed at the Goldman Sachs conference, only not by Chapek.
Comcast CEO Brian Roberts called Hulu, which has around 46 million subscribers, a “phenomenal business” that would likely attract not only a host of competitive bidders but also a much higher price that the minimum $27.5 billion valuation agreed in 2019.
Disney has another 16 months to complete the purchase or leave it to a rival, and Chapek told the Financial Times earlier this week that he would like to finalize things before the January 2024 deadline.
Disney shares were marked 0.2% higher in pre-market trading to indicate an opening bell price of $112.75 each. Comcast shares, meanwhile, rose 0.67% to $34.70 each.
Last month, Disney said ESPN+, its sports-focused streaming business, ended the third quarter with 22.8 million paid subscribers, with average revenue per user rising 1.8% from last year to $4.55.
Overall, Disney said adjusted diluted earnings for the three months ending in June, the group’s fiscal third quarter, came in at $1.09 per share, up 36.25% from the same period last year and firmly ahead of the Street forecast of 97 cents per share.
Group revenues, Disney said, rose 26% to $21.5 billion, topping Street forecasts, while overall subscriber totals for its Disney+ hit 152.1 million, topping analysts’ estimates by around 3 million.