Comcast Would Shed Fox’s 30% Stake In Hulu To Win Regulatory Approval

By Dawn C. Chmielewski, Dade Hayes


Comcast is prepared to make concessions, including shedding Fox’s stake in the online streaming service Hulu, in order to win regulatory approval for its $65 billion offer to acquire most of 21st Century Fox’s film and television assets, according to sources.

The U.S. cable giant, in a competing bid submitted yesterday, promised to match any of the remedies The Walt Disney Co. offered to gain regulatory approval for itsĀ $52.4 billion offer to buy Fox. Disney’s offer of divestiture is believed to include Fox’s 22 regional sports networks or the company’s one-third interest in Hulu, through a Disney spokesperson did not respond to a request for comment.

The disclosure, first reported on Twitter by Recode’s Peter Kafka, raises questions about the future of Hulu, which was founded more than a decade ago as a joint venture of NBCUniversal, Fox and Disney. Time Warner later took a 10% stake. Originally envisioned as media’s industry’s bulwark against the threat of unlicensed content gaining audiences on YouTube, Hulu now it is positioned as a competitor to streaming giant Netflix.

NBCUniversal CEO Stephen Burke touted the value of Hulu in a call with investors yesterday in discussing the value Fox’s assets would bring to the Philadelphia media company. He described the streaming service as a “wonderful asset” and an important element of the deal.

“We’ve invested hundreds of millions of dollars in Hulu to try to grow it into a robust competitor,” said Burke. “And we think the fact that it has around 17 million subscribers now is a really good head start on eventually being a robust, one of the best SVOD businesses in the country.”

Hulu reported in January that it reached the 20 million subscriber mark.

UBS media analyst John Hodulik asked Comcast if there would be any regulatory issues with NBCUniversal, which currently holds a 30% interest in the streaming service, gaining majority control with the addition of Fox’s 30% stake.

Comcast CFO Michael Cavanaugh said the media giant thinks it should be able to acquire a majority stake in Hulu and expects to do so, through a successful bid for Fox.

“It would create great value for us to have it and we would love to have it,” Cavanaugh said.

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