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Hulu in Talks to Sell Stake to Time Warner (Report)

Deal would value streaming service north of $5 billion

Hulu is in talks to sell a stake to Time Warner, a deal that would value the streaming service at between $5 billion and $6 billion, according to a Wall Street Journal report on Thursday.

The capital would aid Hulu in its effort to compete with Netflix and Amazon. The investment would make Time Warner an equal stakeholder in Hulu alongside Walt Disney Co., 21st Century Fox Inc. and Comcast Corp.

If the deal — which is preliminary at this point — goes through, those current owners would draw down their stakes to 25 percent apiece to accommodate the fourth partner.

Not only would Hulu get Time Warner’s cash, it would also get content not licensed elsewhere. Time Warner’s HBO, of course, has its own streaming service, HBO Now.

The three current owners are committed to investing $750 million into Hulu after taking it off the sales block in 2013. Over the past year and a half, Hulu has upped its content outlays from $600 million in 2014 to $1.5 billion this year, according to estimates from Nomura Securities.

Time Warner unveiled its third quarter 2015 earnings last Wednesday, topping Wall Street expectations. HBO and Warner Bros. growth fueled the three-month success story. That said, company stock slipped immediately afterward when CEO Jeff Bewkes lowered expectations for 2016.

Bewkes (pictured above) also told media analysts at the time that he’s still evaluating whether the company should keep its content rights longer, thus making streaming outlets wait for television and movie programming. Except for Hulu, it seems.

Neither Hulu nor Time Warner immediately responded to TheWrap’s request for comment on the discussions.