TV networks increase stake in Hulu

30/04/2012

Hulu’s media ownership partners are close to buying out one of their number. NBCUniversal, News Corp., The Walt Disney Company and members of the Hulu team are to purchase the stake owned by Providence Equity Partners at a price that values the company at $2 billion.

Bloomberg cited two unnamed sources with knowledge of the matter in reporting that Providence is selling its 10 percent share in Hulu for $200 million after investing $100 million when the venture began in 2007. Its report added that the companies will also allow CEO Jason Kilar and other Hulu employees to sell some shares of the closely held online TV service.

Hulu currently has more than 2 million subscribers who each pay $8 a month to watch Hulu Plus, Hulu’s service that includes an expanded library of premium content and more options for screens on which to view them.

Hulu’s owners – News Corp, Disney, NBCUniversal and Providence Equity Partners – put the site up for sale last summer, with Disney CEO Robert Iger commenting in July that the site’s owners were “committed to selling the business.”

However, the firm took itself off the market in October after months of talks, claiming it will instead focus on developing the service itself. Amazon, Yahoo! and satellite TV firm Dish Network were said to have been the front-runners for the site, with the leading offers reportedly ranging from US$1.5bn to US$2bn.

Since then, Hulu has pledged to spend US$500m on content in 2012 after reporting a 60% rise in revenue in 2011. The firm also recently reached two million subscribers for its premium Hulu Plus service and announced four new shows at its TV-style digital upfront event in New York last week.

News of the Providence sale comes amid claims that a deal could allow Hulu executives, including CEO Jason Kilar, to also sell their shares in the business.

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