Hulu buys back AT&T’s stake in $1.43 bln deal

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Tue, 2019-04-16 02:05

Hulu is buying back wireless carrier AT&T Inc’s 9.5
percent stake in the US entertainment streaming service in a deal
valued at $1.43 billion, the two companies said on Monday.
Hulu, which competes with Netflix Inc. and Amazon.com’s Prime
Video, has more than 25 million subscribers and is expected to lose
$1.5 billion in the current fiscal year.
The deal implies Hulu’s total value is some $15 billion — up
from a reported $5.8 billion in 2016, when Time Warner — now a
part of AT&T — bought the stake. Netflix at the time had a
market capitalization of about $41 billion and is currently valued
at $152 billion as on Monday’s close.
The move gives Walt Disney Co, which holds a 60 percent stake in
Hulu via a joint venture, more control of the company.
Comcast Corp’s NBCUniversal has a 30 percent stake. Based on the
joint venture agreement, Disney and Comcast will decide on how they
want to allocate the shares bought from AT&T.
It was unclear how the deal could affect content on Hulu in the
immediate future. AT&T is preparing to launch its own
subscription streaming video service.
Hulu Chief Executive Officer Randy Freer said in a statement that
“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.”
AT&T did not respond to a Reuters request for comment on the
structure of the deal.
The wireless carrier said it would use the proceeds from the deal
to cut down its debt, which stood at $176.5 billion at the end of
2018.
The company had said in November it could consider selling its
stake in Hulu and review its non-core assets in 2019.
Disney last week forecast Hulu’s subscribers to reach 40 million
to 60 million by fiscal 2024 and become profitable in the United
States by either 2023 or 2024.

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Source: FS – All-News-Economy
Hulu buys back AT&T’s stake in .43 bln deal