Media Money with Julia Boorstin

Hulu Talks to Sell 'Very Preliminary'

Since Hulu hired bankers Morgan Stanley and Guggenheim Partners to advise on a potential sale, the company has been setting up meetings with potential buyers. Despite the fact that the Los Angeles Times reported today that "Google is in preliminary talks to buy online video pioneer Hulu," a number of sources very close to the negotiations tell me that all talks are "very preliminary" and it is "impossible to characterize anyone as being in the lead."

Hulu is less than half-way through its presentations with 10 to 12 companies, a group my sources describe to me as "all the usual suspects." Those talks are scheduled to continue through next week and the following week.

Who are the potential buyers? We can expect Hulu to sit down (or have already sat down with) Google, Microsoft, Yahoo, Verizon, AT&T, Dish, DirecTV and even AOL.

One company that is definitely not on that list is Netflix, which sources tell me is not interested, and which simply isn't considered a good match because of its pre-existing relationships with content providers.

Another company which is unlikely to be interested in Hulu is Apple, because it's already created a robust Hulu-alternative with its iTunes offerings, which already has secured deals with media companies.

Sources tell me that the initial round of meetings is not focused on private equity players like KKR. If one of these private equity companies expresses interest, Hulu will indeed meet with them, but it's not the priority in this round.

Hulu's sale is sure to be a hot topic at the Allen & Co. conference in Sun Valley next week. Though the corporate presentations won't have wrapped up by then, all the big players will be there—the CEOs of all of Hulu's co-owners, NBC Universal*, News Corp, Disney, plus pretty much all of the potential buyers.

It would be unlikely that a deal would wrap up after next week, but we can certainly expect the lunches and cocktails between CEOs to move things along.

While Hulu shops itself around, it's in the process of finalizing its deals with its co-owners. It's made a handshake deal with Disney and Fox for how it'll compensate for content. Whatever deal Fox and Disney strike, NBC Universal has to match—a term Comcast agreed to in its purchase of a majority stake of NBC Universal.

The fact that these deals are in the process of being nailed down is likely one reason the company's management feels comfortable reaching out to potential buyers. And sources tell me that the owners are serious about selling, provided they can draw a reasonable price. The number that's been thrown out there for Hulu is $2 billion to $2.5 billion.

* NBCUniversal is the corporate parent of CNBC.

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