AT&T (NYSE: T) has reportedly joined Chernin Group to offer up a last-minute bid to acquire video streaming service Hulu.
According to a Bloomberg story, the two began discussing a partnership in June to make a bid on the service and were among the final bidders to meet Friday's deadline. Others bidding on the service--according to sources, since the bidding information is closed--are DirecTV (Nasdaq: DTV), Guggenheim Digital LLC, Yahoo! (Nasdaq: YHOO), Time Warner Cable (NYSE: TWC), and KKR & Co. Silver Lake Partners and William Morris Endeavor Entertainment, who partnered up for their own bid. The story said that the value of the AT&T-Chernin offer was not immediately available but that DirecTV had set the bar at $1 billion.
Hulu would fill an important niche for both AT&T's U-verse IPTV video service and Chernin, which produces content for television such as New Girl, on Fox, and would use Hulu as a conduit to present its wares online.
All of this bidding, of course, was hush-hush and only came to light thanks to people with knowledge of the situation who spoke with Bloomberg. Company spokespersons, including AT&T's Brad Burns, Hulu's Meredith Kendall and Chernin's Charles Sipkins, declined to comment to Bloomberg.
Hulu is a joint venture of Comcast's (Nasdaq: CMCSA) NBCUniversal Television Group, 21st Century Fox, which recently split from News Corp. (Nasdaq: NWSA) and Walt Disney Co.'s (NYSE: DIS) ABC Television Group. Comcast, as part of the terms permitting its NBCUniversal acquisition, has no management rights to the company.
The online service provider, which competes with the likes of Netflix (Nasdaq: NFLX), offers both free ad-supported and subscription (Hulu Plus) over-the-top programming that is heavy on TV content from its three partners. That programming, and particularly that online capability, would be attractive to the likes of DirecTV, which has limited broadband capabilities of its own, and U-verse, which could make it another ingredient of a TV Everywhere play. Time Warner Cable, meanwhile, could be making a bid just to block its competitors.
Buying the service will only be the first step for the successful bidder. The next, and potentially more onerous step, will be negotiating content licensing. Part of the approval might include deals with Disney and Fox, and AT&T, though U-verse, could have some leverage with other programmers while Chernin would bring its own content to the mix.
For more:
- Bloomberg has this story
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