Hulu LLC has acquired AT&T Inc.’s 9.5 percent stake in a deal that is worth almost $1.43 billion. The deal has left the business with two owners: Walt Disney Co. and Comcast Corp. Prior to the deal, Walt Disney Co-owned 60 percent while Comcast Corp owned 30 percent. As HULU acquires AT&T, one can expect to see some changes as far as the business strategy goes.
Los Angeles based company Hulu used to be co-owned by 21st Century Fox Inc., Comcast, Disney and AT&T. As Disney was ambitious enough to spend $71 billion in order to acquire Fox’s entertainment businesses, it gained more control. Bob Iger, Disney’s Chief Executive Officer, has shown interest to buy the rest.
The remaining owners(namely Disney and Comcast) will have some decisions to take. The two companies have to figure out how they are going to divide up that 9.5 percent stake.
AT&T decided to use the money they gained to pay the debt it took when it did an 80 billion dollar business in order to acquire Time Warner which is now known as Warner Media. So basically, the main reason for this whole deal is to pay the heavy debt that the company owed.
“We thank AT&T for their support and investment over the past two years and look forward to collaboration in the future,” Said Randy Freer, Hulu CEO.
“I’m surprised, but not surprised, by the AT&T sale,” said Mr. Michael Pachter, a media industry analyst. “They really need Hulu, but I suppose they need to pay down debt more.”
The whole situation comes after Disney decided to reveal its Disney+ streaming service. As we know, it will launch in November. It is not clear how Disney+ service will make an impact on the contents that are currently airing on Hulu. Let’s wait and watch!