Comcast Interference In Hulu Deal Could Torpedo Time Warner Merger

Comcast Interference In Hulu Deal Could Torpedo Time Warner Merger

Comcast is reported to have interfered in the sale of Hulu, a competitor to its cable TV business, in a move that could derail its mega-merger with rival Time Warner.

The cable giant allegedly talked its fellow Hulu investors out of selling the TV streaming service to DirecTV or AT&T by insisting it could steer the business to financial success.

The accusations are serious because Comcast had explicitly agreed with the FCC and US Department of Justice to keep its hands off the management of Hulu. After Comcast's interference, Hulu's investors Disney and Fox decided against selling the upstart to Comcast's cable rivals.

The allegations were published in Thursday's Wall Street Journal: it reports that, during a convention in Idaho in 2013, Comcast repeatedly assured Disney and Fox executives that it would position Hulu as a money-making rival to Netflix.

The indiscreet bragging apparently torpedoed a sale Hulu had planned to Comcast's competitors DirecTV and AT&T. If the allegations are true, it means Comcast broke its 2011 agreement with the DoJ before Comcast acquired NBC/Universal from General Electric. In the deal Comcast promised it would give up any management control over Hulu, including its seat on Hulu's board of directors, and make its content available to Hulu for streaming over the internet.

Comcast has thus far been silent on the matter.

Should the DoJ pursue a case against Comcast, the cable giant's proposed $45bn acquisition of Time Warner Cable would likely be in jeopardy. The merger already faces stiff opposition, and is headed for a formal hearing with the FCC. A further DoJ complaint could be the final nail in the coffin of a deal already considered to be on the rocks.

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