Hulu’s owners, News Corp. (NASDAQ:NWSAV), Walt Disney Co. (NYSE:DIS) and Comcast Corp.’s NBC Universal (NASDAQ:CMCSA), have extended their second-round bid deadline for the online video site from today to mid-next week.
DirectTV, which is expected to submit a bid of approximately $1 billion, is competing with at least three other contenders including Guggenheim Digital Media and Chernin Entertainment, in partnership with AT&T (NYSE:T).
“There are really just three main bidders left: DirecTV, Chernin and Guggenheim,” said a source interviewed by the New York Post, adding that Hulu “pushed back the deadline because DirectTV isn’t ready.” DirectTV, Guggenhein, Hulu and Chernin Entertainment declined to comment on the extension.
Yahoo! Inc. (NASDAQ:YHOO) and KKR (NYSE:KKR) have also expressed interest in purchasing Hulu but were pushed out of the auction as their bids, ranging between $600 to $800 million, were too low. On the other hand, Time Warner Cable Inc. (NYSE:TWC) is offering to simply buy a portion of the five-year-old Los Angeles-based video service.
Hulu states on its website that its video programming is provided by more than 480 content companies including FOX, NBC Universal, and Nickelodeon. With more than three million subscribers, who pay $7.99 a month for its plus premium service, Hulu generated revenue of $700 million including advertising last year. The future of Hulu has been up in the air for some time. Back in 2011 Hulu’s owners Disney and News Corp., which each own about one-third, and Comcast, who owns most of the remaining third but relinquished control after purchasing NBC Universal, put it on the market.
Allegedly, is for sale again because its owners are failing to agree on how to generate revenue. According to several reports, News Corp. prefers the paid subscription model while Disney endorses generating funds from advertising, enabling free video streaming. In the meantime, the primary bidding contenders are scratching their heads after reading the fine print in Hulu’s programming contracts with major networks, which indicate limitations in airing new episodes of popular programs for up to one month. Wall St. Cheat Sheet will continue to follow this story so stay tuned for an update next week.