Rumour that Disney will have to sell Lucas Film and some parks to pay for Hulu

[Henadic Theologian]

Has anyone else heard the rumours that the deal they have to make with Universal over Hulu will cost so much (possibly as high as 70 billion dollars) that Disney will basically have to do a fire sale to pay for it, including selling Lucas Film, Paris & some parks in Asia, parts of Fox Studios, etc...?

They can't use treasury stock to pay it either as that could trigger government intervention over too much media concentration.

Apparently when you subtract the expenses from cash on hand, Dusney only has about 200 million dollars of spendable cash on hand that is not ear marked for bills.

Personally I've never been a fan of Lucas Film, except I enjoyed Willow, so I find this interesting.

 

[Hatmatter]

I would be interested in an article with information about this. It makes no sense to me. Streaming services are struggling to even be profitable. Lucasfilm has been an immensely profitable division for Disney.

Further, not everything is always about money. Star Wars has been an immensely successful brand to include within the Disney banner. Bob Iger knows this quite well.

If there is truth to this, I would be interested in the rationale.

 

[Henadic Theologian]

I would be interested in an article with information about this. It makes no sense to me. Streaming services are struggling to even be profitable. Lucasfilm has been an immensely profitable division for Disney.

Further, not everything is always about money. Star Wars has been an immensely successful brand to include within the Disney banner. Bob Iger knows this quite well.

If there is truth to this, I would be interested in the rationale.

Star Wars WAS a profitable brand, but each Disney Star Wars movie made less money, but Solo the last Star Wars movie, made like 1.6 billion less then the first Disney Star Wars movie, so they stopped making them and switched to streaming.

That worked for awhile, especially with the success of the Mandolarian season 1&2, but rescent Star Wars (Andor and Mando season 3) had their viewership absolutely crater.

To make matters worse, SW rival Star Trek is growing in popularity again, Amazon has some huge sci fi plans with Stargate and Warhammer 40k, and I think its Warner Bros who are doing the Babylon 5 thing, with an animated movie and a rebooted series going.

Heck Disney itself contains a major competitor in the Orville.

Indy Dial of Destiny is projected to have 60 million opening weekend, which is a disaster.

Willow TV show got pulled, so Lucas film increasingly has dimishing value at Disney, but because of its legacy has value as a product to sell.

There is even a rumour the perpective buyer is George Lucas himself, possibly supported by smaller investors.

Its internet rumours so it could be wrong, but I don't see how Disney can pay for Hulu without drastic measures and Disney has no choice, but to buy Hulu contractually,so it almost doesn't matter how Lucas Films was doing, they may have no choice but to sell it, even of it was doing alot better.

 

[Snarf Zagyg]

Its internet rumours so it could be wrong, but I don't see how Disney can pay for Hulu without drastic measures and Disney has no choice, but to buy Hulu contractually,so it almost doesn't matter how Lucas Films was doing, they may have no choice but to sell it, even of it was doing alot better.

On this.

Don't believe internet clickbait. PLEASE. I'll give you a quick example from your OP-

Has anyone else heard the rumours that the deal they have to make with Universal over Hulu will cost so much (possibly as high as 70 billion dollars) that Disney will basically have to do a fire sale to pay for it, including selling Lucas Film, Paris & some parks in Asia, parts of Fox Studios, etc...?

So here's what we know.

1. Disney owns 2/3 of Hulu. Comcast owns the other third.

2. That situation is untenable. In January, 2024, both sides have the option to force the sale.

3. While Comcast would like to get Hulu (Comcast also owns Peacock), for various reasons that is very unlikely and it is much more likely that Disney will buy out Comcast.

4. However, because of Disney's acquisition of Fox ($71.3 billion, 2017), as well as taking out loans during the pandemic, Disney has more debt right now than they would like.

5. In 2019, the guarantee Disney gave to Comcast was ~$9 billion for their portion.

6. Disney's long-term debt last quarter was $48.5 billion (net debt is considerably less), which is substantially less year-over-year. About $ 6 billion less.

7. The debt is 3.4 times EBITDA, which is a little higher than they want. but fine for the industry.

Just from that, we can quickly surmise that they could finance the purchase if they wanted to. However, they might want to unload some underperforming assets. Which ones? Maybe none. But some of the speculation is just wrong. For example, the international parks are not wholly owned by Disney, but are all joint ventures with partners; there would be obvious issues with Disney exiting from the ... Disney business. So that's a no-go, and anyone suggesting that as likely is just trying to accumulate traffic without any analysis.

Fundamentally, that's the issue. The best performing part of Disney is the Parks (including Cruises) right now. Quite literally, they can't afford to get rid of those. On the other hand, it makes no sense to divest themselves of content creation in order to add Hulu to Disney+, given that they will need ... content. They also want the content for ... the Parks! So Lucasfilms and Fox also seem incredibly unlikely. Not to mention that would be undoing two of the biggest wins in Iger's legacy.

What's it going to be? Who knows. Maybe debt. Maybe ESPN and ABC? I would wait for something sourced from a reliable report- the rest will just be noise.

 

[Umbran]

Has anyone else heard the rumours that the deal they have to make with Universal over Hulu will cost so much (possibly as high as 70 billion dollars) that Disney will basically have to do a fire sale to pay for it, including selling Lucas Film, Paris & some parks in Asia, parts of Fox Studios, etc...?

Sniff test time.

Disney already owns two-thirds of Hulu. If the remaining third is $70 billion, that makes Hulu's total value $210 billion - more than all of Disney. So, no. That's just wrong. Time for Mr. Google to come to our aid...

The $70 billion number seems to come from a 2021 claim by NBCUniveral of Hulu's total value. But the value of streaming services has tanked since then.

When Disney struck a deal to possibly buy the remaining third, they set a total value of about $27 billion - making the remaining third about $9 billion.

 

[Umbran]

3. While Comcast would like to get Hulu (Comcast also owns Peacock), for various reasons that is very unlikely and it is much more likely that Disney will buy out Comcast.

Comcast already had the opportunity to buy out the rest of Hulu - they passed on it because so much of the content on Hulu is owned by Disney anyway.

 

[Snarf Zagyg]

Comcast already had the opportunity to buy out the rest of Hulu - they passed on it because so much of the content on Hulu is owned by Disney anyway.

AFAIK, they never officially had the chance. Disney got the majority due to its acquisition of Fox.

Pursuant to that acquisition, Disney has always had the superior rights from a 2019 agreement. I know that Iger publicly was musing about it, but again, I haven't seen any reports about a serious offer. Did I miss something?

 

[Umbran]

AFAIK, they never officially had the chance. Disney got the majority due to its acquisition of Fox.

Pursuant to that acquisition, Disney has always had the superior rights from a 2019 agreement. I know that Iger publicly was musing about it, but again, I haven't seen any reports about a serious offer. Did I miss something?

I was speaking of buying Hulu, not buying Fox, just to be clear.

At this level you don't make a serious offer and only then realize, "Wait, the folks we are buying it from also own all the content! Silly us, that was dumb!" So, no serious offer was made.

The articles I saw mentioned this as a strategy that NBCU considered, and then discarded. The point being that, contrary to your suggestion, NBCU doesn't want to be sole owner of the service. They'd be over a barrel on licensing.

 

[Snarf Zagyg]

I was speaking of buying Hulu, not buying Fox, just to be clear.

At this level you don't make a serious offer and only then realize, "Wait, the folks we are buying it from also own all the content! Silly us, that was dumb!" So, no serious offer was made.

The articles I saw mentioned this as a strategy that NBCU considered, and then discarded. The point being that, contrary to your suggestion, NBCU doesn't want to be sole owner of the service. They'd be over a barrel on licensing.

Well, that's not quite true from what I understand. This is what I wrote-

3. While Comcast would like to get Hulu (Comcast also owns Peacock), for various reasons that is very unlikely and it is much more likely that Disney will buy out Comcast.

That's true. The reasons (which I alluded to) that it would not occur are twofold; first, the put-call option. Second, the licensing issues.

Comcast would like to get Hulu for quite a few reasons- namely it would be a relatively cost-effective way to add a profitable (Hulu, despite the overall issues, is profitable) streamer to Peacock; arguably with a better branding.

But what I was getting at is that you said that Comcast had the opportunity to buy it and passed, which is not something I think has ever been reported that I know of. Prior to the Fox acquisition, Comcast did not have the opportunity, and after the acquisition, they were offered the put-call as the minority owner.

 

[Parmandur]

Yeah, this rumor is a pie in the sky, fan fantasy. Not happening. Disney can buyout Hulu with stock or debt, if they need to, handily, and they arenlatting go of IP or profit centers.

 

[Umbran]

Well, that's not quite true from what I understand. This is what I wrote-

3. While Comcast would like to get Hulu (Comcast also owns Peacock), for various reasons that is very unlikely and it is much more likely that Disney will buy out Comcast.

You know, the difference of opinion of what "would like to get" means is not worth arguing over.

 

[Henadic Theologian]

On this.

Don't believe internet clickbait. PLEASE. I'll give you a quick example from your OP-



So here's what we know.

1. Disney owns 2/3 of Hulu. Comcast owns the other third.

2. That situation is untenable. In January, 2024, both sides have the option to force the sale.

3. While Comcast would like to get Hulu (Comcast also owns Peacock), for various reasons that is very unlikely and it is much more likely that Disney will buy out Comcast.

4. However, because of Disney's acquisition of Fox ($71.3 billion, 2017), as well as taking out loans during the pandemic, Disney has more debt right now than they would like.

5. In 2019, the guarantee Disney gave to Comcast was ~$9 billion for their portion.

6. Disney's long-term debt last quarter was $48.5 billion (net debt is considerably less), which is substantially less year-over-year. About $ 6 billion less.

7. The debt is 3.4 times EBITDA, which is a little higher than they want. but fine for the industry.

Just from that, we can quickly surmise that they could finance the purchase if they wanted to. However, they might want to unload some underperforming assets. Which ones? Maybe none. But some of the speculation is just wrong. For example, the international parks are not wholly owned by Disney, but are all joint ventures with partners; there would be obvious issues with Disney exiting from the ... Disney business. So that's a no-go, and anyone suggesting that as likely is just trying to accumulate traffic without any analysis.

Fundamentally, that's the issue. The best performing part of Disney is the Parks (including Cruises) right now. Quite literally, they can't afford to get rid of those. On the other hand, it makes no sense to divest themselves of content creation in order to add Hulu to Disney+, given that they will need ... content. They also want the content for ... the Parks! So Lucasfilms and Fox also seem incredibly unlikely. Not to mention that would be undoing two of the biggest wins in Iger's legacy.

What's it going to be? Who knows. Maybe debt. Maybe ESPN and ABC? I would wait for something sourced from a reliable report- the rest will just be noise.

Lucasfilm is not a win for Igor, even a Star Wars none fan like me knows that.

 

[Henadic Theologian]

Yeah, this rumor is a pie in the sky, fan fantasy. Not happening. Disney can buyout Hulu with stock or debt, if they need to, handily, and they arenlatting go of IP or profit centers.

Can't use stock, too much media concentration with that deal, and Disney stock is doing poorly anyways

 

[Parmandur]

Can't use stock, too much media concentration with that deal, and Disney stock is doing poorly anyways

They have more than 9 billion dollars of it (which h is what they have promised Universal), and this actually increases competition ao it shouldn't be a problem.

 

[Zardnaar]

Only thing I've seen is a YouTube thumbnail from usual suspects so didn't click on it.
It's possible Disney hasn't made money on Star Wars. They only get around half the box office so 4 billion paid plus oroduction costs of the movies.

They're losing money on streaming. They lost money on galactic Star Cruiser.

That leaves them park attractions, merchandise (books, toys, comics etc) and games. Seems unlikely they have made billions on that.

I find it very unlikely George will buy I back. Not impossible they'll sell it but I doubt it he's the one buying it.

 

[Henadic Theologian]

They have more than 9 billion dollars of it (which h is what they have promised Universal), and this actually increases competition ao it shouldn't be a problem.

It decreases it because now the biggest entertainment company owns a huge part of its rival.

 

[Parmandur]

It decreases it because now the biggest entertainment company owns a huge part of its rival.

No, it increases competition, because it allows Comcast to disentangle and reinvest in their own platform. No way this would be stopped by regulators, pure fantasy land wishful thinking on some Internet click batters part.

 

[Henadic Theologian]

Only thing I've seen is a YouTube thumbnail from usual suspects so didn't click on it.
It's possible Disney hasn't made money on Star Wars. They only get around half the box office so 4 billion paid plus oroduction costs of the movies.

They're losing money on streaming. They lost money on galactic Star Cruiser.

That leaves them park attractions, merchandise (books, toys, comics etc) and games. Seems unlikely they have made billions on that.

I find it very unlikely George will buy I back. Not impossible they'll sell it but I doubt it he's the one buying it.

They may have made some money on the old Star Wars merch at first and Baby Yoda, but merch tied to other Disney Star Wars characters and their gear hasn't done well at all.

George Lucas HATES what Disney did with Star Wars, he compared them to White Slavers. They wrecked pretty much everything he made at Lucasfilm.

Indy is on track to lose massive amounts of money, its audience score among top critics is 40% at RT, all critics 51%, the reviews are nightmare fuel. They had to stop making Star Wars movies because they started at making 2 billion dollars and end up on a downward spiral to losing money on Solo. Weather that is normal for Star Wars or not, it looks horrible to investors. It has a massively divided fan base, and unlike Star Trek that rift isn't healing its growing wider. The streaming shows have been massively hemeraging audience, even the Mandolarian.

The Galaxy Hotel was a disaster.

Willow didn't just get cancelled, it got pulled after 6 months. So yeah George Lucas is likely pissed and perhaps with rich partners he will buy Star Wars back, he is a multibillionaire with connections to other rich folks. I mean Disney literally destroyed the man's entire legacy, they even killed off most of his most iconic characters, Luke, Leia, and Solo.

All this while other parts of Disney are imploding, no one will watch Pirates without Johnny Depp, Marvel is starting to spiral downwards mostly and taking the Superhero genre down with it, folks are sick of increasingly poorly done live action remakes of Disney classics and they are running out of run way for it anyways, Pixar is dropping duece after deuce with Elemental likely tanking as well.

The only studio largely uneffected at Disney is Fox Studios with Avatar movie making billions, Orville very popular, and a possible Serenity/Firefly revival series coming.

You add the none optional Hulu deal and Disney may be very inclined to sell Lucasfilm to George Lucas, it'd be less embarrassing then selling it to a large rival.

Also Star Wars is about to be under more competition then ever before.

Also its fandom is aging out very quickly compared to other fandoms in the sci fi sphere.

 

[Henadic Theologian]

No, it increases competition, because it allows Comcast to disentangle and reinvest in their own platform. No way this would be stopped by regulators, pure fantasy land wishful thinking on some Internet click batters part.

No, what the US government would object to is Comcast owning so much of Disney, it'd give them too much power over a rival, they won't object to Disney buying Hulu, its Comcast having a huge stake in Disney. Disney needs to spend cold hard cash on this deal.

 

[Parmandur]

No, what the US government would object to is Comcast owning so much of Disney, it'd give them too much power over a rival, they won't object to Disney buying Hulu, its Comcast having a huge stake in Disney. Disney needs to spend cold hard cash on this deal.

9 billion isn't a big stake in Disney.