Hulu stays put: owners choose new investment over sale

The owners of Hulu said the over-the-top TV service will not be sold and that they will instead infuse it with $750 million of new capital to “propel future growth.”
The announcement, which came Friday afternoon, comes after a variety of major communications companies — including satellite provider DirecTV and AT&T(s t) — signalled interest in acquiring Hulu, which offers viewers a way to watch recent TV shows.
The news means that the existing trio of 21st Century Fox(s fox), Walt Disney(s dis) and NBC Universal(s CMCSA) will continue to develop the service. The companies did not say if the new capital will be primarily directed to expanding Hulu’s free-advertising model or, instead, to promoting the subscription service, Hulu Plus.
The decision to hold onto the site is not a big surprise in light of the strategic dilemma that confronts Hulu’s current owners: the company’s value lies in its programming — but, in any sale, the current owners do not want to include long-term licenses for fear of diluting the overall value of the programming.
Here is how Chase Carey, President and Chief Operating Officer of 21st Century Fox, explained the decision:
“We believe the best path forward for Hulu is a meaningful recapitalization that will further accelerate its growth under the current ownership structure. We had meaningful conversations with a number of potential partners and buyers, each with impressive plans and offers to match, but with 21st Century Fox and Disney fully aligned in our collective vision and goals for the business, we decided to continue to empower the Hulu team, in this fashion, to continue the incredible momentum they’ve built over the last few years.”