Hulu today announced that it has bought back AT&T’s minority share of its streaming service in a transaction that has already been approved and closed.
The company said the transaction valued Hulu at $15 billion, with AT&T’s 9.5% interest valued at $1.43 billion. Hulu is the entity purchasing AT&T’s shares, and Hulu’s owners (Disney and Comcast) now have a window of time to allocate the shares.
“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, in a statement.
AT&T, which had previously hinted at selling off its stake in Hulu, said it will use the proceeds, along with additional planned sales of non-core assets, to reduce its debt.
Today’s deal again shifts the ownership structure for Hulu. Earlier this year Disney completed its $71.3 billion acquisition of certain 21st Century Fox assets and that included Fox’s 30% stake in Hulu. Disney now owns 60% of Hulu.
Hulu, along with ESPN+ and the forthcoming Disney+, is a key piece of Disney’s direct-to-consumer streaming strategy. Disney said that by 2024 Hulu will grow to between 40 million and 60 million subscribers – it’s currently at 25 million but, as Disney revealed last week, that total only includes 23 million paid subscribers.
Hulu, which has been a significant money loser for Disney, Comcast and AT&T, is projected to see its operating losses peak this year at $1.5 billion and then achieve profitability by 2023 or 2024.