Hulu Auction Cancelled by Owners

Posted by at 1:00 pm on July 12, 2013

hulu-logo[1]The auction for Hulu is off. A news release announcing the decision was jointly issued by 21st Century Fox, NBC Universal and the Walt Disney Co. on Friday morning. It came after a final bid that reportedly topped $1 billion from DirecTV, one that reportedly topped $900 million from Peter Chernin and AT&T and interest from Time Warner Cable in acquiring a stake.

“Hulu has emerged as one of the most consumer friendly, technologically innovative viewing platforms in the digital era. As its evolution continues, Disney and its partners are committing resources to enable Hulu to achieve its maximum potential,” said Robert Iger, chairman and CEO of The Walt Disney Company.

“We believe the best path forward for Hulu is a meaningful recapitalization that will further accelerate its growth under the current ownership structure,” said Chase Carey, president and COO of 21st Century Fox.

The auction had drawn initial bids bids from Yahoo, Silver Lake Management with William Morris Endeavor, and also a final-round bid from Guggenheim Digital Media, the parent company of The Hollywood Reporter, in partnership with private equity firm KKR. Hulu generated about $695 million in revenue in 2012 via ad sales and through 4 million subscribers who pay for monthly access to Hulu Plus, the company’s premium service.

It’s the second time in two years that Hulu’s owners have considered selling the company, and pulled the plug on an auction. Two years ago, some potential buyers were hesitant over a lack of assurances that Hulu would retain access to TV programming from Disney, Fox and NBCU if those companies were no longer equity owners.

Sources familiar with the process said last-round bidders were disappointed by the last-minute cancellation of the auction. One source said bidders were only told on Friday that the current owners had pulled the plug.

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