S&P: Disney and Comcast Should Resolve Hulu Sale in 2025
Disagreements between Disney and Comcast over Hulu's value should be resolved in 2025, with Disney then making final payments to Comcast for its 33% ownership stake in the streaming service, S&P said Monday. A worst-case scenario for Disney has it…
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making a $5 billion final payment, the ratings company said. Moreover, Disney's global streaming business, now profitable, should see continued improvement as the company increases subscribers globally, S&P added. Disney's streaming advertising revenue was $3.7 billion in fiscal 2024 -- more than its linear TV ad revenues, excluding ESPN -- and the streaming ad revenue should grow at a double-digit percentage for the next few years. S&P said Disney's linear TV revenue will likely decline at a 9% annual rate. It said while some legacy U.S. media and entertainment companies won't survive the pivot from a linear TV-focused ecosystem to a streaming one, Disney "is the best positioned" among legacy players due to its iconic brands, film and TV studios, theme parks, global distribution footprint and the diversity in its media and entertainment businesses. In addition, S&P raised its issuer credit rating on Disney from A- to A and short-term ratings from A-2 to A-1, based on expectations the company will maintain leverage below 2.5 times and free operating cash flow to debt above 15% long term.