Who should buy Hulu?

Deals Now that Hulu’s parent companies have retained investment bankers to explore a possible sale of the catch-up TV service — following earlier reports of an unsolicited bid from Yahoo — handicapping the Who Buys Hulu sweepstakes has become more or less de rigueur for industry pundits and bloggers. Therefore, in order to maintain my membership in good standing, here are my picks:

DirecTV: The sat-caster has been working on a streaming video service and TV Everywhere play for at least the past year and acquiring Hulu could greatly accelerate those efforts. While DirecTV might be able to negotiate for rights similar to what Hulu has directly, without having to pay a premium for an acquisition, the Hulu embedded app would give DirecTV an immediate presence on millions of CE devices as well as a well-trafficked web site. The Hulu Plus subscription tier would also give DirecTV a leg up in launching an authenticated TV Everywhere service. Since the sat-caster has a national footprint there would be no conflict between Hulu’s ubiquity and the territorial scope of DirecTV’s existing rights.

Just as important, the satellite service provider could make for a congenial buyer to Hulu’s current parent companies. The networks already have retransmission consent deals with DirecTV and the need to renew those deals periodically gives them leverage to exercise some de facto strategic control over Hulu ex sale — likely a critical consideration for the networks. While NBC’s new owner, Comcast, might object to selling Hulu to a competing MVPD, the terms of its merger with NBC Universal imposed by the FCC prohibit Comcast from exercising any management control over Hulu, so any hint of interference would likely be pounced on by the Justice Department.

Dish: Dish could make for a congenial buyer as well, for the same reasons cited for DirecTV. Many of the same strategic considerations also obtain for both sat-casters (although Dish’s sisterhood with the Slingbox makes a TV Everywhere play less urgent). In addition, Dish recently bought Blockbuster and is widely expected to use it to launch a major assault on Netflix. Blockbuster combined with Hulu would make a far-more formidable competitor than either alone.

Management: Hulu CEO Jason Kilar and has team have done an admirable job in getting Hulu this far. In the face of early skepticism, Kilar and company built a compelling, user-friendly and now widely popular service despite being hamstrung by their parent companies’ ambivalence toward the whole enterprise.

Kilar is keenly aware of the strategic constraints imposed on Hulu by its current ownership structure, however, and has been straining to break free of them. Backing Kilar and his team without the strings attached might not be a terrible bet.

A few general points: Much has been written about what Hulu is actually worth and what a buyer would really be getting, much of it riffing off uncertainty about the longevity of Hulu’s deals with its content providers and their transferability to third parties. Some have even speculated that uncertainty around those issues makes any deal unlikely.

Hulu’s parents obviously understand those concerns, however. I think we can assume that, by retaining investment bankers to pursue a possible sale, the networks are signaling that they’re at least willing to consider extending Hulu long-term, transferable licensing deals, if they haven’t done so already, to make a strategically suitable deal happen.

The terms of the Comcast/NBC deal may also have shifted the balance of power on the Hulu board by eliminating one network vote, thereby enhancing the influence of Providence Equity, whose interests presumably are primarily financial rather than strategic. That might make a deal more likely, particularly to a buyer like DirecTV or Dish, for whom Hulu is probably worth more in the near term than to some of the other names being bandied about, like Google, Amazon or Microsoft, for whom online video is merely one, still-smallish piece of much larger businesses.