Peter Kafka

Recent Posts by Peter Kafka

Would-Be Hulu Buyers Will Have Their Checkbooks Ready Next Week

Quick update on the Hulu auction: Would-be buyers are expected to offer up their initial bids by the end of next week, according to people familiar with the company.

That will end the first step of a sales process that began in late June, when the video site hired bankers and started chatting up other media companies. Next up: A more complicated discussion about what, exactly, buyers would be buying.

People familiar with the process think Hulu’s owners — Disney, News Corp., Comcast and Providence Equity — are expecting bids of at least $1.5 billion for the site and its licenses. (News Corp. also owns this Web site).

Hulu’s original investors valued the company at $1 billion back in 2007; bankers floated a $2 billion number when they floated an IPO last year. But the final purchase price could move around, depending on what Hulu ends up selling.

It’s possible, for instance, that some of Hulu’s owners could hang on to their stakes, which could push the purchase price down. Alternately, a buyer could ask the company’s network owners to increase the length of Hulu’s exclusive online license, and end up paying even more for those rights.

News Corp. COO Chase Carey alluded to some of the uncertainty¬†during his company’s earnings call yesterday, when asked about the sale (emphasis added; transcript via Seeking Alpha):

I’m not going to speak too much of the way Hulu’s running the process. We’re obviously partners, so I think probably they are the right ones to speak to. It is obviously ongoing, and I think, progressing largely according to plan, but for us, I think we’ll see where it ultimately ends up. And I think for us, it’s still a decision to see where — what it looks like at the end. Does it make sense to pursue that path or does it make sense for us to stay in an ownership position and continue to have it driven by content owners. But I think it’s on course and on schedule, but I’ll let Hulu speak to it in more detail.

Assuming there is a sale, my hunch is that Yahoo is still the most logical buyer. The list of potential buyers, of course, is a very big one, with everyone from Google to Apple to Amazon taking a look-see. Here’s a rundown of the players from last month.

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