Walt Disney said on Wednesday it may have to pay up to $5 billion more to buy Comcast’s minority stake in Hulu, if an appraiser were to agree with Comcast’s assessment that the stake should be valued at more than $40 billion. Earlier this year, Disney and Comcast hired investment bank RBC Capital as the independent appraiser to resolve a dispute over how to value the 33% stake in the streaming platform, according to people familiar with the matter. Reuters was first to report in May that Disney and Comcast were seeking to hire an independent adviser.

The two sides have entered into arbitration proceedings to resolve the dispute and a final decision is expected in fiscal 2025. Disney and Comcast signed an agreement for Hulu in 2019 with an option strike date of January 2024, after Disney’s $71 billion takeover of Fox’s assets, including its minority stake in Hulu.

The deal gave Disney majority control over Hulu as it already owned a 33% stake. Comcast retained its stake at the time believing that its value would rise significantly by 2024. In November last year, Disney agreed to take control of Hulu and pay Comcast at least $8.6 billion for the remaining 33% stake, after Comcast triggered the deal as part of the 2019 agreement. Disney said on Wednesday if the independent adviser’s valuation is equal to or below the guaranteed floor value of $27.5 billion, it would not have to pay Comcast anything more than the $8.6 billion that it paid out last year. If RBC’s appraisal is in line with Comcast’s evaluation, Disney will have to pay Comcast $5 billion more. If it falls between the earlier evaluations by both sides, Disney would have to pay anywhere between $0 and about $5 billion.

JPMorgan, Disney’s adviser on this deal, valued Hulu at less than $27.5 billion, which is the floor valuation that the companies had set in their 2019 “put-call” agreement.

Morgan Stanley, which is Comcast’s adviser, valued Hulu at $40.8 billion. In regulatory filings last year, Disney and Comcast had said if the valuation reached by their banks were within 10% of each other, a deal will take place at a valuation that is the average of the two appraisals. Since that was more than 10% apart, Comcast and Disney picked RBC to carry out an independent appraisal.

—Anirban Sen and Aditya Soni, Reuters