The Walt Disney Company is “in active discussions” with AT&T regarding WarnerMedia’s 10% ownership share in Hulu, according to a report from Variety.
Disney currently own a 30% stake in the streaming platform; Fox and Comcast/NBCUniversal both own 30%, and the last 10% belongs to WarnerMedia. That is all about to change, as Disney is nearing completion of its 21st Century Fox merger and a federal appeals court has just given approval for AT&T’s takeover of Time Warner. Once both of those acquisitions go through, Disney will own a full 60% of Hulu and AT&T will control WarnerMedia’s 10%.
AT&T has previously expressed interest in jettisoning some Time Warner properties, including Sky Mexico and Hulu, to gain working capital after the expensive takeover. Variety’s report also points out that Time Warner has never held a Hulu board seat.
This is all happening as Disney is reorganizing its direct-to-consumer content in advance of the release of Disney+, the company’s own streaming service set to debut soon. While there are a number of expensive new shows slated for the platform, including live-action Marvel and Star Wars series, Disney is keeping the focus family friendly. Programs with more adult content or general audience appeal will wind up on Hulu, the four recently announced adult-animation Marvel series for example.
If Disney purchases the additional 10% from AT&T, the only other shareholder will be Comcast, whose 30% will be much more difficult to acquire. Just recently, NBCU CEO Steve Burke told Variety, “Disney would like to buy us out. I don’t think anything’s going to happen in the near term.”
Disney appears to be investing in Hulu for the long haul, even as the streaming provider’s recent performance hasn’t been considered successful. While Hulu claims to have gained 8 million subscribers in 2018 — bringing the total to 25 million by that year’s end — and grown it’s add revenue by 45%, investments in technology and programming still left the company with an overall loss of $1.5 billion for the year.