Media

Let the Hulu bidding tag teams begin: AT&T mulls joint bid with Chernin Group

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Telecom company AT&T is the latest in a growing list of companies interested in making an offer to by streaming TV service Hulu, according to an AllThingsD report last night that cites unnamed sources familiar with the matter.

However, AT&T isn’t trying to purchase Hulu on its own. ATD’s sources indicate that the company is in talks with former News Corp. exec Peter Chernin’s Chernin Group about making a joint bid for the service. Chernin was initially rumored to have made an early bid of $500 million for Hulu, which falls far below the current Hulu owners’ (News Corp., Disney, and silent partner Comcast) asking price of $2 billion. At that figure, its difficult to see how any one company would justify buying Hulu, but two or more could conceivably get closer to the original asking price.

For AT&T, buying Hulu would make a lot of sense. AT&T could reasonably offer the streaming video service as a complimentary service bundled through its mobile data service subscriptions as well as its Uverse broadband Internet and television services. I’m sure there would be some federal regulatory stipulations, but since AT&T isn’t a media company like the current Hulu owners, it might have a bit more leeway. (Comcast, for instance, is barred from making any business decisions about Hulu as part of the FCC’s stipulations for OK’ing its acquisition of NBCUniversal.) And as ATD’s Kara Swisher points out, Chernin would definitely benefit from AT&T’s added financial might.

In addition to the possible AT&T/Chernin tag team, more joint-bids for Hulu are be expected from other interested parties, according to the report. Last week DirecTV reportedly made a $1 billion offer, which tops the rumored $600-$800 million bid by Yahoo made just days earlier. Other companies interested in buying a piece of Hulu include Time Warner Cable, Amazon, and Guggenheim Digital Media.

The takeaway from the current crop of speculation and rumors seems to be that Hulu is at least worth $1 billion. It’ easy to debate if the service is actually worth that amount because much of its value is tied to current prime-time TV content licensing deals. Yet, as it stands, both News Corp. and Disney will terminate further bidding if offers of at least $1 billion aren’t on the table like they did last year, according to ATD’s sources.

Illustration by Tom Cheredar