Hulu is owned by Disney (NYSE:DIS), News Corp. (NASDAQ:NWSA), and Comcast (NASDAQ:CMCSA). However, Comcast had to give up its right to a board role and the power to make decisions for the company because of a regulatory deal. Together, Disney and News Corp. made the decision to put Hulu up on the auction block.
Hulu has a lot of potential as a property. In 2012, it raised its annual revenue by 65 percent, reaching $695 million. Though it falls quite shy of Netflix’s (NASDAQ:NFLX) levels, it does boast 4 million subscribers to its $8-a-month service. With such performance, the company managed to get the interest of buyers rather quickly.
Yahoo! Inc (NASDAQ:YHOO) is among those interested in buying the company, and probably quite serious about landing the deal. Recently, Yahoo tried to acquire the French video site Dailymotion, but French regulators blocked the deal. Hulu presents another opportunity for Yahoo to add to the strength of its video service, it also offers a way for Yahoo to monetize its video.
Besides Yahoo, there are many other companies interested in getting a bite of Hulu. DirecTV (NASDAQ:DTV) and Time Warner Cable (NYSE:TWC) would both have a lot to gain from acquiring Hulu, as they would be able to expand the reach of their services more deeply into the Internet. Guggenheim Partners is also bidding for the company.
Peter Chernin used to be the chief operating officer for News Corp. and was fundamental in creating Hulu. The bid from the Chernin Group could get Chernin in control of a company that he knows well. With AT&T’s help, Chernin’s chance of getting the Hulu has gone up some.
The initial bid from the Chernin Group was in around $500 million dollars, but the bids will likely have to go up significantly as the auction goes on. People close to the matter said that the owners might not sell Hulu if the bidding doesn’t exceed $1 billion. For that reason, AT&T will be extremely helpful to the Chernin Group.
Though the group has significant funds, it would be much easier to have a partner in bidding adding the the available funds for the auction. And, AT&T could make for a good partner, as the company’s interest in Hulu is likely as intense as DirecTV’s or Time Warner Cable’s. AT&T would also be able to expand its Internet presence with the addition of Hulu’s service.
There is still some uncertainty surrounding the bids for Hulu. For one, there have been some suggestions of companies just buying a stake to put them on level with the current owners, which could make for some odd partnerships between competitors like AT&T and Comcast. Other worries include the ability to continue getting licenses for the content that has made Hulu so successful — if Disney and News Corp. are no longer with the company, their content may not be available on the website for much longer either.
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