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Comcast's dealings with Hulu could jeopardize its merger with Time Warner Cable

Comcast's dealings with Hulu could jeopardize its merger with Time Warner Cable


Comcast told its partners it could turn Hulu into a nationwide streaming platform for the cable TV industry

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Comcast's involvement in the potential sale of Hulu may dampen its chances of getting its proposed merger with Time Warner Cable approved by the Justice Department. According to The Wall Street Journal, Comcast, 21st Century Fox, and Disney executives met at the Allen & Co. conference in 2013 to discuss the potential sale of Hulu — which was garnering billion dollar offers at the time. Instead of hammering out the sale, Comcast reportedly convinced its partners that it could raise Hulu's value and make it a true competitor to Netflix, promises that played a significant role in the decision to pull Hulu off the market, according to The New York Times.

Comcast is restricted from making management decisions involving Hulu

Due to its deal with the Justice Department when it acquired NBC Universal (through which Comcast acquired its stake in Hulu), Comcast's role in management decisions involving Hulu were severely restricted. Comcast agreed not to "influence, control, or participate in the governance or management of Hulu," and its influence over the potential sale of Hulu has raised questions within the government about how compliant Comcast would be if restrictions were placed on the proposed Time Warner Cable merger.

The Justice Department will sit down with Comcast on Wednesday to discuss its potential merger with Time Warner Cable, and Hulu is bound to come up. If the Justice Department doesn't believe Comcast will adhere to the conditions it places on the merger, it could choose not to approve the deal. As for Comcast, it denies any wrongdoing in its dealings with Hulu. "Comcast has no role in making, evaluating, or reconsidering any management decisions at Hulu," a Comcast spokesperson told The Wall Street Journal. All strategic decisions at Hulu are made by the other partners and not by Comcast." We'll find out if the government believes Comcast soon enough.

Verge Video archive: Comcast's argument for buying Time Warner Cable (2014)