Hulu's sellers cry 'cut,' scrap sale

Co-owners 21st Century Fox, NBCUniversal, and Walt Disney say they'll pump $750 million into the video-streaming service to "continue to empower the Hulu team."

Hulu

It looks like streaming-video site Hulu is no longer on the sales block.

Co-owners 21st Century Fox, NBCUniversal, and Walt Disney said in a release Friday that they will "maintain their respective ownership positions in Hulu and together provide a cash infusion of $750 million in order to propel future growth."

"We believe the best path forward for Hulu is a meaningful recapitalization that will further accelerate its growth under the current ownership structure," 21st Century Fox COO Chase Carey is quoted as saying in the release. He continues:

We had meaningful conversations with a number of potential partners and buyers, each with impressive plans and offers to match, but with 21st Century Fox and Disney fully aligned in our collective vision and goals for the business, we decided to continue to empower the Hulu team, in this fashion, to continue the incredible momentum they've built over the last few years.

The news comes a day after former Disney CEO Michael Eisner told Bloomberg TV that Hulu's current owners would, after a sale, be "taking away basically the next-day availability" of their TV shows -- referring to how Hulu now screens prime-time TV shows from ABC, NBC, and Fox a day after they air. (ABC is owned by Disney.) Eisner said:

If it is bought by a content-oriented production kind of company, it will then move from a company that is basically repeat broadcasting to original broadcasting. That is very expensive. Therefore, the price you pay for the actual asset will be tempered by what you think you have to spend to make that asset work because NBC, Fox, ABC are not going to give you a great deal anymore on their own content.

A first round of bids had involved a handful of prospective buyers, and a second narrowed the suitors down to DirecTV and a partnership of AT&T and the Chernin Group, according to media reports . Time Warner Cable also was reported to be interested in Hulu, but as a partner with its current owners rather than as an outright buyer.

In 2011, Hulu's owners, which then included Providence Equity Partners, called off a sale of the service. Concerns over post-sale access to content reportedly led to some potential buyers backing away from the bidding process.

Here's today's press release in full:

21st Century Fox, NBCUniversal and The Walt Disney Company to Maintain Ownership Positions in Hulu

Companies Make Commitment to Recapitalize Hulu with $750 Million in New Funding to Propel Future Growth

NEW YORK & BURBANK, Calif.--(BUSINESS WIRE)--21st Century Fox, NBCUniversal and The Walt Disney Company today jointly announced that they will maintain their respective ownership positions in Hulu and together provide a cash infusion of $750 million in order to propel future growth.

Launched in 2008, Hulu is now a leading aggregator of premium online television content from over 400 content partners, and has achieved more than 30 million monthly unique visitors.

"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 A. Iger, Chairman and CEO, 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 Chief Operating Officer of 21st Century Fox. "We had meaningful conversations with a number of potential partners and buyers, each with impressive plans and offers to match, but with 21st Century Fox and Disney fully aligned in our collective vision and goals for the business, we decided to continue to empower the Hulu team, in this fashion, to continue the incredible momentum they've built over the last few years."

Hulu launched its premium subscription service, Hulu Plus, in 2010, which has now surpassed four million subscribers after more than doubling in 2012. Hulu achieved record revenues of $690 million that same year.

Updates, 11:12 a.m. and 11:25 a.m. PT: Background added.

 

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