Hulu Minus

Internet TV venture increasingly struggling as site's sales process drags on

As the Hulu sales process drags on, the Internet TV venture increasingly is struggling with its best and brightest employees jumping ship amid uncertainty about who their new bosses will be.

Hulu’s job listings pages currently show 97 open positions — and at least 70 of those have been posted in the past two months. According to Hulu, the company’s attrition rates are within normal ranges, and its total headcount is growing, as revenue and subscriber levels continue to increase. Hulu has about 640 employees worldwide, up 30% from a year ago.

Hulu’s search for fresh blood starts at the top: CEO Jason Kilar, who frequently clashed with the company’s owners over strategy, left in March. He was replaced on an interim basis by senior veep of content Andy Forssell.

Chief technology officer Richard Tom, who had been with Hulu since 2007, left shortly afterward. Late last month, the firm lost senior vice president of international Johannes Larcher, who had led the foray into Japan and was scoping out additional overseas plans.

Other recent departures: co-head of content Robert Schildhouse, who joined CBS as senior VP of digital licensing and distribution in March; VP of product Rob Wong, now with ride-sharing app startup Sidecar; head of HR John Foster, who left in January to start a social media company called Gamut; Josh Siegel, principal project manager responsible for all video streaming technology, now VP of product at Cognitive Networks; and Simon Gallagher, director of international strategy and business development, now director of content acquisition at Netflix.

Meanwhile, Kilar and Tom have teamed up to form a stealth technology startup in Los Angeles aimed at the digital living room, according to blog Tech-Crunch. The duo may be trying to lure away the Hulu engineers they originally hired and worked with closely for the past few years.

Despite the uncertainty, Hulu has managed to retain several key managers.

Forssell, a former U.S. Army captain, remains in place as temp CEO, and continues to lead Hulu’s content development and acquisition strategy. Also still onboard are senior VP of advertising JP Colaco and senior VP of marketing and distribution Pete Distad, whose responsibilities include customer acquisition and retention.

Two of the company’s owners, News Corp. and Walt Disney Co., have solicited bids to buy their 33% stakes in Hulu. The third owner, NBCUniversal, is prohibited from exercising management decisions for seven years under the government’s approval of the Comcast takeover of NBCU; however, it is possible for a buyer to acquire the Comcast/NBCU interest as part of a larger deal, according to industry sources.

Oddly, Hulu’s senior personnel are actually rooting for the winning bidder (or bidders) to come in at the low end of the price range. Here’s why: Hulu’s parents renegotiated employee compensation packages when the trio bought out the 10% stake owned by Providence Equity Partners last year. That meant staffers with stock-option grants received cash payouts — and now won’t get any potential upside once News Corp. and Disney sell their equity stakes.

As a result, Hulu execs are crossing their fingers that a new owner will spend less acquiring them so they have capital to invest in the company post-sale. But the loss of equity compensation makes it tougher for Hulu to retain top-flight managers and developers.

Potential buyers engaged in the Hulu auction are said to include Time Warner Cable, DirecTV, Yahoo, Guggenheim Partners and private-equity firms KKR and Silver Lake Partners, the latter of which is pairing up with talent agency WME. In another unusual combo, AT&T is considering making a joint bid with the Chernin Group.

News Corp. and Disney hope to reach agreements on the sale before the end of the summer, according to sources. But for the Hulu crew, the resolution can’t come quickly enough.

Dearly Departed

Jason Kilar CEO

Richard Tom Chief technology officer

Johannes Larcher Senior vice president of international

Robert Schildhouse Co-head of content

Rob Wong VP of product

John Foster Head of HR

Josh Siegel Principal project manager responsible for all video streaming technology

Simon Gallagher Director of international strategy and business development

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