Disney emerged as 60% owner of Hulu in March when it acquired the entertainment assets of 21st Century Fox Inc. for $71 billion. The Burbank, California-based entertainment giant increased its stake last week when Hulu agreed to buy out minority investor AT&T Inc. That deal valued Comcast’s stake in the service at $4.5 billion or more.

Hulu, home to hits such as “The Handmaid’s Tale,” is poised to become a key part of Disney’s emerging direct-to-consumer business, which includes the ESPN Plus online sports platform and the new Disney Plus streaming service for children and families. Disney is expanding online as more consumers drop traditional pay TV for internet-based competitors like Netflix. Hulu will focus on more-grownup fare. Last year, the service added 8 million subscribers, a gain of nearly 50%.

Comcast, based in Philadelphia, is weighing a number of factors, including valuation, future controls on Hulu and how to use the potential proceeds, CNBC said, citing unnamed sources. It’s unclear if a deal will come together, the network said.

Disney, which had long-term debt of $17.2 billion at the end of 2018, took on additional borrowing with the Fox deal. S&P lowered its rating on Disney’s obligations by one notch to A from A+ last month, citing operational risks associated with the purchase of Fox assets.

Shares Rise

Disney shares gained as much as 2.3% to $138.14 on the news. The stock is up 26% this year. Comcast was up as much as 4.7% Thursday after reporting upbeat quarterly results Thursday, but it pared its gains. It was up less than 3% as of 12:34 p.m. in New York.

Comcast has never had a big say in Hulu’s operations. The cable operator was barred from influencing the service under a consent decree with the U.S. government linked to its takeover of NBC Universal in 2011. The service got its start providing catch-up viewing to shows that had just aired on the major networks.

In an interview on CNBC Thursday, Comcast Chief Executive Officer Brian Roberts said Hulu is “really valuable.”

“On Hulu, the relationship with NBC — it’s very much in everybody’s interest to maintain,” Roberts said. “And we have no new news today on it, other than it’s really valuable. And we’re really glad we own a large piece of it.”

While Hulu has grown in subscribers and valuation in recent years, it is still a financial drag on its owners. Disney said in an investor presentation this month that it plans to expand the service internationally. The company expects Hulu to have as many as 60 million customers by fiscal 2024, up from 25 million last year. Losses, Disney said, would peak at $1.5 billion this year, with profit not attainable for four or five years more.

“We’re still assessing the prospect and timing of international launches, which would have an impact on our financial outlook for Hulu,” Disney Chief Financial Officer Christine McCarthy said at the event.