Hulu reported to be for sale


Rumors have been swirling that Disney and News Corp. are pushing for a sale of Hulu, which they own along with NBCUniversal, Providence Equity and Hulu employees. Now the Los Angeles Times reports that the would-be buyer is Yahoo!

The report says Hulu has engaged investment banks Guggenheim Partners and Morgan Stanley to work on a possible sale.

What’s the video streaming site worth? Bloomberg and SNL Kagan got together to come up with a valuation that might exceed $2 billion – nearly 50 times this year’s earnings.

Of course, the value is not about earnings alone, but primarily growth prospects. Yahoo! is believed to want Hulu to compete with Netflix. That prospect may also draw into the bidding. Who else? That remains to be seen.

RBR-TVBR observation: The big worry for any buyer is access to content. CBS Corp. has never put its content on Hulu, holding out for higher pricing. No doubt Disney, News Corp. and NBCU will want more in the future as well, particularly if they no longer have an ownership stake in Hulu.