Hulu Buys Out AT&T’s Stake in Streaming Service for $1.43B
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Hulu has agreed to buy AT&T’s stake in the streaming service for $1.43 billion, the companies said Monday.
With The Walt Disney Co.’s purchase of 21st Century Fox, Disney holds a controlling 60% interest in Hulu.
After AT&T acquired Time Warner last year--Time Warner owned a 9.5% stake in Hulu--AT&T determined that the Hulu stake was not a core asset.
Related: Disney Making Big Bet on Service With Low Price
Comcast owns the remaining 30% stake in Hulu.
The AT&T transaction values Hulu, which is losing hundreds of millions of dollars per year, at $1.43 billion.
Last week, Disney said that it expected Hulu’s subscriber base to grow from its current 25 million subscribers to between 40 and 60 million subscribers by 2024.
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Disney also said that Hulu’s operating losses would be $1.5 billion in fiscal 2019. Losses will narrow slightly in 2020 and the service could turn a domestic profit in 2023, Disney forecast.
Disney is also thinking about rolling out Hulu internationally.
“We thank AT&T for their support and investment over the past two years and look forward to collaboration in the future. WarnerMedia will remain a valued partner to Hulu for years to come as we offer customers the best of TV, live and on demand, all in one place,” said Hulu CEO Randy Freer.
T&T will use proceeds from this transaction, along with additional planned sales of non-core assets, to reduce its debt.
Jon has been business editor of Broadcasting+Cable since 2010. He focuses on revenue-generating activities, including advertising and distribution, as well as executive intrigue and merger and acquisition activity. Just about any story is fair game, if a dollar sign can make its way into the article. Before B+C, Jon covered the industry for TVWeek, Cable World, Electronic Media, Advertising Age and The New York Post. A native New Yorker, Jon is hiding in plain sight in the suburbs of Chicago.