AT&T May Team With Chernin to Bid for Hulu

Telco latest to enter auction for Internet TV service, according to report

Chernin Entertainment TV

The field of bidders for Hulu remains in flux, with AT&T now said to be in discussions with Chernin Group, led by former News Corp. COO Peter Chernin, to enter a joint proposal to acquire Internet TV site Hulu.

The telco is considering teaming up with Chernin Group, which first threw its hat into the Hulu ring earlier this spring, according to a report by AllThingsD, citing anonymous sources. Reps for AT&T and Hulu declined to comment.

Others in the running include DirecTV, Time Warner Cable, Yahoo, Guggenheim Partners and private-equity firms KKR and Silver Lake Partners, which is pairing up with talent agency WME.

Two of Hulu’s owners — Walt Disney Co. and News Corp. — are seeking to exit the business, which they see as strategically misaligned with their own interests. According to sources close to Hulu, News Corp. and Disney are hoping to reach an agreement on the sale process within the next eight weeks.

The third owner, Comcast’s NBCUniversal, is prohibited from exercising any management decisions regarding Hulu under the government’s conditions for the cable company’s takeover of NBCU.

Reports have cited varying price tags in the current bids for Hulu, ranging from $500 million to $1 billion. According to sources familiar with the situation, the differences are due to the terms of the content rights for News Corp. and Disney/ABC that prospective buyers are seeking.

In any case, the prices being floated are less than the $2 billion Hulu’s owners reportedly sought in 2011 (even setting aside NBCU’s interest).