Hulu Bids Are In: But Will They Sell?

30 May
hulu

Is Hulu up for grabs?
Image: Hulu

The subscription TV service Hulu is potentially up for grabs, and everyone seems to be rushing to get a bid in. Last year the company brought in nearly $700 million in revenue from ads and paying subscribers (of which there are about 4 million), so it’s likely that they will be looking for bids of $1 billion or more.

Hulu is currently owned by three different companies: News Corp., Walt Disney Co., and Comcast Corp. While Comcast operates as a “silent” partner, Walt Disney and News Corp. have disagreed on a strategy for the company. This difference in opinion has likely been a main driver in the sale. The shared ownership makes for a tricky situation for buyers, since one, two, or all three can independently decide whether or not to sell.

So who is knocking on Hulu’s door? Everyone is, it seems. Yahoo, who recently acquired Tumbler for a pricey $1 billion, has put in a bid, as has Silver Lake Management teamed with WME Entertainment. Private equity firm KKR, led by business leaders Henry Kravis and George Roberts, has also reportedly put in a bid.

netflix

Hulu, like Netflix, is a leader in next generation television.
Image: Netflix

Time Warner Cable, DirectTV, the Chernin Group, and Guggenheim Digital Media have all also shown an interest, according to inside sources. For each of the bidders and potential bidders, there is a wide array of benefits to acquiring Hulu. Yahoo likely sees this as a chance to get more involved with video media, as Google has done with YouTube. Cable and media companies would probably use the service as a way to distribute media in the future, and companies like Henry Kravis’ KKR are likely interested in the growth potential of Hulu as compared to competitor Netflix.

Will Hulu’s owners actually sell? The bids would have to be high, but we already know that some companies (like Yahoo) are willing to pay a big chunk of money for future investments, so long as they see it paying off in the long term.

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