Comcast is prepared to make concessions, including shedding Foxs stake in the online streaming service Hulu, in order to win regulatory approval for its $65 billion offer to acquire most of 21st Century Foxs 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 its $52.4 billion offer to buy Fox. Disneys offer of divestiture is believed to include Foxs 22 regional sports networks or the companys one-third interest in Hulu, through a Disney spokesperson did not respond to a request for comment.
The disclosure, first reported by Recode, 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 medias industrys 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 Foxs assets would bring to the Philadelphia media company. He described the streaming service as a “wonderful asset” and an important element of the deal.
“Weve 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.”
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 Foxs 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.