Someone is buying Hulu, and the list of suitors is down to three. Before the close of bidding last Friday, AT&T jumped in on a joint offer with the Chernin Group. Peter Chernin founded Hulu years ago when he was still president of News Corp., but his company’s bid was likely too low without the additional backing of AT&T. DirecTV and Time Warner Cable are also in the hunt, and rumor has it that the bids are upwards of $1 billion. Variety reports this morning that Guggenheim Digital is out of the race after submitting a bid below what Hulu was willing to take.
Hulu initially put itself on the auction block back in 2011, but backed away from a sale at the eleventh hour. Google and Dish were the leading bidders then, with Google reportedly offering up to $4 billion for the company as long as Hulu was willing to throw in expanded content licensing rights as part of the deal. (It wasn’t.)
Unlike Boxee, Hulu has built a significant consumer fan base, and the company says it earned close to $700 million in revenue in 2012. However, Hulu still isn’t profitable, and the issue of video licensing fees is a thorny one as programmers try to protect as much of their revenue as possible through the existing pay-TV ecosystem. Perhaps given those conditions, it’s not surprising that a pay-TV company – and not an outsider like TiVo or Google - appears set to come out on top when the Hulu sale finally closes.