Disney and Fox didn't decide to keep Hulu because they couldn't get the bids they wanted for the streaming service. It was because the bids were so good that they stepped back and reconsidered.
The streaming service was pulled back from auction on Friday. TheWrap spoke to two of the main Hulu bidders, and both confirmed that the bids were "aggressive" – between $750 million and $1.4 billion or so. The main bidders included AT&T with Peter Chernin, DirecTV and Guggenheim with KKR.
The initial asking price of $1 billion creeped up during the process, said one bidder, because there were more bidders than anticipated.
The quality of the bidders themselves caused Disney and Fox to take pause – they included the biggest players in satellite, telecom and cable, all looking to buy their way into the streaming game.
Also read: Hulu Sale Called Off by Fox, Disney, NBCU
They were prepared to pay top dollar for the service, too. "We bid aggressively, but they changed their mind," said one bidder who spoke on condition of anonymity.
Said another bidder: "It turned out not to be about the money."
According to one insider on the other side of the negotiation, "The process allowed everyone to reflect on the highest and best use of the asset and align our strategies." That's essentially what News Corp. chairman Rupert Murdoch and Disney CEO Bob Iger said on Friday in Sun Valley, which is more than likely where they made the last-minute decision.
According to the individuals who spoke to TheWrap, the bidders were still being engaged during the day on Thursday.
The strategic pullback was a big move, and it resulted in the unusual decision to announce a massive capital infusion of $750 million into a service that is adding about 1 million paid subscribers per quarter.
When asked what the newly-aligned strategy is, the insider said it was to get the right marketing and distribution going.
That may not be all that hard. "It's a self fulfilling prophecy," said one of the disappointed bidders. "If you put that kind of money into a platform that has 4 or 5 million subscribers you can make it successful with that much money. Because it's all about the content. And they may not have to spend $750 million to get there."