Hulu value soars after purchasing stake from AT&T
Online video service now worth nearly $15 billion to owners Disney, Comcast
And then there were two — owners of Hulu, that is.
Late Monday, Hulu said it paid $1.43 billion to buy the 9.5 percent of the streaming TV company that had been owned by AT&T. The company now is owned by Comcast, which controlled 30 percent of Hulu, and the Walt Disney Co., which owned 60 percent of the service prior to Monday’s deal.
It is not yet known how AT&T’s former stake will be split between Disney and Comcast.
However, the acquisition has bolstered Hulu’s value, which is now $15 billion, or 56 percent more than the $9.26 billion Disney reported in a regulatory filing in November.
AT&T said it would use the proceeds from the sale to pay down debt it took on following its $80 billion acquisition of Time Warner. AT&T’s WarnerMedia unit is also in the process of developing its own subscription-based streaming service that will draw upon TV and movie assets it acquired from Time Warner.
“I’m surprised, but not surprised, by the AT&T sale,” said Michael Pachter, media industry analyst with Wedbush Securities. “They really need Hulu, but I suppose they need to pay down debt more.”
The deal comes less than a week after Disney unveiled its Disney+ streaming service, which will launch in November and cost subscribers $6.99 a month. Disney hasn’t said how the launch of Disney+ might affect any content currently airing on Hulu.
Hulu’s acquisition also came a day before one of its top streaming TV rivals, Netflix, is scheduled to report its fiscal first-quarter results. Wall Street analysts are forecasting Netflix to report a profit of 58 cents a share, on $4.5 billion in revenue, and to add 8.96 million paid subscribers for the three months between January and March. Those gains would give Netflix more than 148 million paid subscribers worldwide.
According to its most recent report, Hulu had more than 25 million subscribers in the United States at the end of 2018.