The Wall Street Journal reports Hulu, which is now owned by two major media companies, has been trying to build a service that can rival Netflix Inc. and other streaming services that are competing for the attention of television watchers.
AT&T inherited its stake when it acquired Time Warner Inc. and had said it planned to sell its position to focus on its own streaming service, which it plans to launch this year. On Monday, AT&T said it sold the 9.5% stake for $1.43 billion.
The valuation is a sharp jump from the $5.8 billion Hulu fetched when Time Warner bought the stake in 2016, but is still dwarfed by Netflix, which has a market capitalization of roughly $150 billion. Hulu has been adding subscribers rapidly and ended 2018 with more than 25 million, while Netflix has reached 139 million.
Hulu is managed by Walt Disney Co., which owns a roughly 60% stake after acquiring shares held by 21st Century Fox Inc. along with other TV and film assets. Comcast Corp. holds a 30% share in the business.
Disney and Comcast will have to negotiate how to divide the 9.5% stake that the joint venture acquired, a Hulu spokeswoman said.
AT&T told investors it would whittle down debt after it spent more than $80 billion to acquire Time Warner, a deal that left the cellphone carrier and pay-TV distributor with more than $170 billion of net debt at the end of 2018. The deal also made the Dallas company a direct competitor of Disney and deepened its rivalry with Comcast, which owns media giant NBCUniversal.
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