Why Disney's Hulu deal is a win for the company's streaming business
Walt Disney 's (DIS) plan to buy the remaining stake of Hulu will give it full ownership of the platform, allowing it to merge its streaming operations on one app while generating fresh advertising opportunities. Disney, which already owns 67% of Hulu, announced Wednesday it had agreed to acquire the remaining stake from Comcast (CMCSA) in a deal valued at $8.61 billion. The transaction, which reflects the guaranteed minimum value of $27.5 billion for the streaming service the two sides agreed upon in 2019 , is expected to close by Dec. 1. Comcast is the parent company of NBCUniversal and CNBC. "There should be a few advantages of Disney having full ownership of Hulu and integrating its content with Disney+ to create a one-app platform," Jeff Marks, director of portfolio analysis, said in regards to Disney's primary streaming service. The deal is also "expected to create more opportunities for advertisers, which has become more and more important in Disney's pursuit of a growing advertiser tier," he added. Disney stock climbed 2.4% Thursday, to trade at roughly $83 a share. Hulu already exists as part of a streaming bundle with Disney+ and ESPN+. But the new ownership structure should allow Disney to create a more valuable streaming service as a single product under the Disney+ umbrella. That could help the company to attract new subscribers and increase its advertising revenue. DIS YTD mountain DSI stock performance year-to-date. Disney's widely expected deal to acquire the remainder of Hulu comes as the company continues to struggle to make its streaming business profitable, even if losses have been narrowing of late. But the development of a one-stop-shop for all Disney's streaming content should at least enhance the customer experience, while also improving engagement. Hulu currently has 48 million subscribers and maintains a library of more than 70,000 TV episodes and movies. That compares with Disney+'s 146.1 million worldwide subscribers. Still, Disney faces ongoing challenges around the fate of ESPN and its lagging linear television business, which could continue to weigh on the company when it next reports quarterly results on Nov. 8. (Jim Cramer's Charitable Trust is long DIS. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust's portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.

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