Hulu Buys Out AT&T’s Stake in Streaming Service for $1.43B

Hulu has agreed to buy AT&T’s stake in the streaming service for $1.43 billion, the companies said Monday.

With The Walt Disney Co.’s purchase of 21st Century Fox, Disney holds a controlling 60% interest in Hulu.

After AT&T acquired Time Warner last year--Time Warner owned a 9.5% stake in Hulu--AT&T determined that the Hulu stake was not a core asset.

Related: Disney Making Big Bet on Service With Low Price

Comcast owns the remaining 30% stake in Hulu.

The AT&T transaction values Hulu, which is losing hundreds of millions of dollars per year, at $1.43 billion.

Last week, Disney said that it expected Hulu’s subscriber base to grow from its current 25 million subscribers to between 40 and 60 million subscribers by 2024.

Disney also said that Hulu’s operating losses would be $1.5 billion in fiscal 2019. Losses will narrow slightly in 2020 and the service could turn a domestic profit in 2023, Disney forecast.

Disney is also thinking about rolling out Hulu internationally.

“We thank AT&T for their support and investment over the past two years and look forward to collaboration in the future. WarnerMedia will remain a valued partner to Hulu for years to come as we offer customers the best of TV, live and on demand, all in one place,” said Hulu CEO Randy Freer.

T&T will use proceeds from this transaction, along with additional planned sales of non-core assets, to reduce its debt.

Jon Lafayette

Jon has been business editor of Broadcasting+Cable since 2010. He focuses on revenue-generating activities, including advertising and distribution, as well as executive intrigue and merger and acquisition activity. Just about any story is fair game, if a dollar sign can make its way into the article. Before B+C, Jon covered the industry for TVWeek, Cable World, Electronic Media, Advertising Age and The New York Post. A native New Yorker, Jon is hiding in plain sight in the suburbs of Chicago.