Hulu Bidding Closed?24 May, 2013 By: Erik Gruenwedel
Media reports say seven companies have submitted bids for Hulu, with a possible sale forthcoming
The secretive bidding process for Hulu and Hulu Plus apparently has closed with seven companies reportedly submitting offers corporate parents Walt Disney Co., Comcast and News Corp. will now consider.
The private auction for the ad-supported online content aggregator and its subscription video-on-demand sister began earlier this year — the second such process in the past three years.
Yahoo, Time Warner Cable, former News Corp. executive Peter Chernin, DirecTV, Guggenheim Digital Media, and private equity firms Silver Lake and KKR have submitted bids for Hulu, according to reports by Reuters, Bloomberg, the Los Angeles Times and The Wrap, which all cited sources familiar with the situation.
Time Warner Cable’s bid is for an equity stake in Hulu. Silver Lake is a minority stakeholder in William Morris Endeavor, the veteran Hollywood talent agency.
Although no bid amounts have been disclosed, it was widely reported that Chernin’s offer was for about $500 million, which included three years of content licenses. The latter represents the biggest hurdle to closing a deal, as interested bidders want some kind of content guarantees going forward.
Indeed, current SVOD market leader Netflix is on the hook for more than $5 billion in third-party content agreements throughout the next several years.
When Hulu’s parents first put the platform up for sale in 2011, the reported asking price was $2 billion, with Dish Network emerging the highest bidder at slightly more than $1 billion. Disney & Co. subsequently took Hulu off the market to reconsider their strategies.
Hulu Plus reported 4 million subscribers at the end of the first quarter. Hulu said it generated about $700 million in revenue in 2012.