Hulu‘s owners, Twenty-first Century Fox, Disney and NBCUniversal, stated on Friday that they are going to stay owners of the online video program, although offering a cash infusion of around $750 million to make sure its future growth.
The owners accepted formal bids for Hulu as lately as last week as part of their 2nd attempt in 3 years to sell the company. However Friday’s announcement indicates the bids were too low. Reports pegged the high end of bidding around $1 billion, which is 1 / 2 of what Hulu was worth whenever the current owners purchased Providence Equity Partners’ 10% stake for $200 million in April 2012.
Amongst the bidders were DirecTV in addition to AT&T together with a group brought by former Fox executive Peter Chernin. Time Warner Cable Inc. was apparently thinking about purchasing a stake in Hulu, instead of taking it over completely.
21st Century Fox President Chase Carey stated in a statement that getting Hulu off the marketplace is the “best path forward.”
“We had significant conversations with several potential partners and buyers, every with impressive plans and provides to match, but with 21st Century Fox and Disney completely aligned in our group vision and goals for the business, we chose to still empower the Hulu team, in this way, to continue the incredible momentum they’ve built during the last few years,” he said.
21st Century Fox last month split from News Corp., which keeps the conglomerate’s posting assets. Hulu’s other owners are The Walt Disney Co. and Comcast Corp.’s NBCUniversal. Comcast is a silent partner as a condition of its getting NBCUniversal in January 2011.
Hulu, which carries older movies and lately shown TV shows from Disney’s ABC, Fox, NBC and some other networks, has over 4 million paying subscribers to its Hulu Plus premium plan.
The $8-a-month plan enables greater use of back episodes and lets viewers enjoy content on multiple products like mobile phones, tablet computers and game consoles. A free version of Hulu only enables viewing on computers. Both versions include ads. This past year, the program generated about $690 million in revenue, but it wasn’t rewarding.