Telecom could use a $1 billion asset sale to pay off debt from the WarnerMedia purchase

AT&T is in talks with Disney to sell the 10% stake of Hulu it acquired when it bought Time Warner Inc., Variety reports, citing unnamed sources.

AT&T, which this week vanquished the Trump Administration’s final legal challenge to its acquisition of Time Warner (recently rebranded as WarnerMedia), has not hidden the notion that an asset sale of Hulu could help ay down debt from the merger.

The erstwhile Time Warner Inc. paid $583 million to buy 10% ownership of the streaming service in 2016 from owners Disney, 21st Century Fox and Comcast-NBCUniversal.

Disney is on pace to own 60% of Hulu once it closes on its purchase of Fox entertainment assets. Purchasing the WarnerMedia share would give Disney 70% control. NBCU CEO Steve Burke recently said his company isn’t interested in selling its 30% stake in Hulu, at least not yet.

While running its Fox purchase by regulators last year, Disney pegged Hulu’s value at $9.296 billion. So figure AT&T might recoup around $1 billion from the sale?

Notably, Disney, WarnerMedia and NBCU are all in the process of developing their own streaming platforms.

Disney has strategically positioned Hulu as an adult-targeted SVOD platform that will fit into its portfolio alongside the yet-to-launch Disney+, which will feature content from its Marvel, Star Wars and other core assets. 

Related