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Expect Disney to crystallize its strategy for Hulu this week as the company reports its first earnings since Bob Iger’s return as CEO, Tim writes.

Why it matters: Hulu's fate is a $27.5 billion question for Disney that has hung over the company ever since Disney acquired majority control of the streaming service in 2019.

Disney is on the hook to buy out Comcast's 33% stake in Hulu — each side holds an option to trigger the deal — as soon as 2024 at a minimum valuation of $27.5 billion. 

What's next: Disney will report its earnings tomorrow after the bell. Discussion about Hulu and Disney's proxy fight with Trian Partners figure to dominate the call. 

Trian's proxy battle will come to a head during the shareholder meeting on April 3. 

The intrigue: It had long been assumed that Disney would end up owning all of Hulu by sometime next year, but Iger's surprise return last November to replace his replacement has muddied the picture. 

Last week, Bloomberg reported that Disney was looking to license its film and TV shows to other networks and streaming services, a dramatic shift from the company's push to keep all of its content exclusive to its own platforms. 

At least one analyst believes the move is a precursor to Disney offloading Hulu, with Comcast as an obvious suitor. 

"We sense investors would view a Disney sale of Hulu quite favorably as it would clarify their streaming strategy, reduce leverage and improve DTC profitability. That said, most investors struggle to see a logical buyer of Hulu beyond Comcast," Rich Greenfield of Lightshed Partners wrote this morning. 

Be smart: This is not the first time Greenfield has argued for a Hulu sale. 

Comcast execs have previously said they'd be open to buying Hulu.

Trian co-founder Nelson Peltz, who is angling to replace Michael Froman on Disney's board, believes that Disney needs to buy out Hulu as soon as possible or “get out of the streaming business.”

Yes, but: Any sale would be complicated by the fact that Disney has used Hulu within its popular streaming bundle, which has helped drive subscriptions for Disney+ and ESPN+. 

1 big thing: Whither Hulu

Illustration of two cartoon hands: one making a thumbs-up, the other making a thumbs-down.

Atmosphere, the Austin-based streaming TV service for businesses, has raised $65 million in a Series D round at a $1 billion valuation.

Why it's the BFD: Atmosphere is unique for its focus on the out-of-home market and its audio-optional programming, Kerry writes. 

Details: Sageview Capital, Valor Equity Partners and S3 Ventures led the deal, the company announced today.

Atmosphere last raised $100 million in December 2021 ($80 million in a Series C and $20 million in debt). Its total funding is $188 million of equity, plus a $50 million debt facility. 

Its 2022 revenue was $55 million and it runs on 80% gross margins, CFO Michael Grisko said last month at Solomon Partners' Media and Entertainment Summit.  

Of note: Atmosphere also announced Blake Sabatinelli will be promoted to CEO. He joined as COO in 2021 after working as CEO of Newsy, the Scripps-owned network that recently rebranded to Scripps News. 

Leo Resig, the former CEO and a cofounder, is now chief innovation officer and co-executive chairman. John Resig, his brother and co-founder, is the other executive chairman. 

2. The BFD: Atmosphere's unicorn moment

Illustration of a flatscreen television featuring a unicorn on a rainbow background

Vox Media raised $100m from Penske Media Corp. The investment reportedly values Vox at $500m, which is just half of what the company was worth when NBCUniversal invested back in 2015, Sara Fischer reports. https://axios.link/3RAM6nx

Jimmy Finkelstein, a longtime media investor and entrepreneur who formerly owned The Hill, raised $50m for his new venture called The Messenger, Sara reports. https://axios.link/3YB00s9

GlossAi, a Tel Aviv-based, AI-driven video generator, raised $8m in seed funding. New Era Capital led, and was joined by Guidestar ventures, 97212 Ventures, MindCET Ventures, Ginossar Ventures, Maccabee Ventures, Rafi Gidron, Zipris Family and others. https://axios.link/40zDuS7

🎮 Latent Technology, a U.K.-based startup that's building AI-based tech for developing video games, raised $2.1m in pre-seed funding. Root Ventures and Spark Capital led, and were joined by Bitkraft, Kia Kokalitcheva reports. https://axios.link/3DJ8wgs

👀 Forbes' pitch deck: A group of investors led by India-based SUN Group is trying to lure tech billionaires and Hollywood types to join their bid, which values the firm at $800m, Sara and Kia report. https://axios.link/3RDRo1k

Playtika, an Israeli gaming company, offered €9.05 per share or €683m for Rovio Entertainment, the Finnish video games company behind "Angry Birds." https://axios.link/3Y927DB

Madison Square Garden Entertainment is exploring a sale of its stake in Tao Group Hospitality. https://axios.link/3jAdvt0

Mediawan Group, the French media group that acquired Brad Pitt's Plan B Entertainment, launched a €100m TV development fund with backing from French private equity firm Entourage Ventures. https://axios.link/3JLtv6n

3. Deal flow

Banijay named Stéphane Préfol as head of mergers of acquisitions. He is currently an associate director at Publicis Groupe. https://axios.link/3juhXd2

TelevisaUnivision promoted Jennifer Rogers to EVP for consumer and corporate marketing of U.S. networks. https://axios.link/3RA2kgq

tvScientific named Chris Johnson its first VP of technology. Prior, he was VP of engineering at Infillion. https://axios.link/3JL9MUm

Verve hired ICM, Gersh and CAA veteran Max Nagler to oversee partnerships. https://axios.link/3Xawt7e

The CW named longtime HBO and WarnerMedia executive Chris Spadaccini as head of marketing. https://axios.link/3HH16eL

Endeavor named IMG's Maura McGreevy as chief communications officer. https://axios.link/3x3jl9n

4. Movin' on up (or out)

Crooked Media staffers are latest podcasters to join a union (Bloomberg)

"In a letter to management, staff say they're looking for a more 'equitable' workplace that provides transparency around promotion requirements and salary, as well as prioritizing diversity in hiring. They also told Bloomberg that return-to-office requirements haven't applied to all staff equally, which they'd like to see change," Ashley Carman reports.

Grammys ratings jump, but figures still far behind pre-pandemic era (Axios)

"Award shows saw huge viewership declines during the pandemic, but have slowly started to regain some of their lost viewership. Still, the decline of award show audiences has pushed award show organizers to begin putting their productions on streaming services," Sara writes.

Court explains decision to let Meta acquire VR firm (Axios)

"Supporters of Khan's agenda have argued that the commission needs to push forward with ambitious cases, even against long odds, in order to advance antitrust law into the digital age and to build supportive case law for future trials," Ashley Gold reports. 

5. Channel surfing

Illustration of a surfer with a television in the place of his head.

🏈 Situational awareness: The NFL signed a 10-year deal with DAZN Group to make DAZN the exclusive streaming home for NFL Game Pass International beginning next season.

@tim_bays: Retreat day two in D.C., where absolutely nothing else is happening tonight. 

@kerrymflynn: Excited for company karaoke. 

✏️ Thanks to George Moriarty for editing and Jay Bennett for copy editing this newsletter.

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February 07, 2023

1 big thing: Whither Hulu