Disney, a company that's currently valued at $152 billion, is buying Hulu at an expected cost of about $8.6 billion. Disney's gross profit according to Macrotrends is about $28.8 billion per year right now. That's profit, not revenue. I think they can probably afford it.
Not sure why anybody would be surprised. Disney is an institution. Disney might as well announce that their main business competitor is Lockheed Martin Corp.
Disney also has 44.5 Billion dollars in long term debt and over 100 billion in total liabilities according to macrotrends. They may be profitable, but most of their profit is going to pay off their debts (most of which is debt from the buyout of Fox, which is also the reason they are forced into buying Hulu). Disney does not want to be buying Hulu, in the since that 8.6 billion could be instead allocated to either paying off debt or creating real content. 8.6 billion dollars could be 43 blockbuster movies at a 200 million per movie budget.
I don't see how this helps them either. They have to buy it is all. I don't understand the valuation either. NBC will pull their content and it will just be all Disney owned content. If they were not obligated to buy this I doubt they would.
By all accounts Peacock is floundering and the industry is poised to start cross-licensing all their content again. Very few companies have the content library to pull off a first-party-only streaming service. Even Disney is struggling with this lately.
That debt to income ratio is really nothing though. We think that's a lot, but I bet Disney is pretty comfortable sitting on it. Imagine if I could just pull myself up by my bootstraps and pay off my house in 2 years.
A lot of Disney’s previous years’ profit was due to being paid generously from cable/satellite TV channel fees, but those have been in free fall for some time and are not coming back.
