Second-round bids for the streaming start-up Hulu are due this week, but a sale looks less and less likely as the owners debate demands for conditions around the bids, according to individuals knowledgeable about the auction.
The leading candidate is likely to be Dish Network, which has indicated a willingness to come close to the desired sale price of $2 billion.
That price would be offered under the current content deals at Hulu, which is co-owned by NewsCorp, Comcast, Disney and Providence Equity.
While that may be very close to the desired bid, the owners -- particularly NewsCorp CEO Rupert Murdoch -- have vacillated in recent weeks over whether a sale is the best outcome.
Disney CEO Bob Iger is believed to be firmly in the 'sell' camp. But even he wants rock-solid assurances about the buyer before voting yes.
At stake is the question of whether Hollywood's content companies are ultimately going to be principal players in the new world of digital streaming, or whether they will remain licensors of their products -- outside vendors.
That long-term strategic question is what is causing hesitation on the part of the owners, since Hulu is a rare case of the content companies having launched a successful digital platform that is functional and growing.
People are waking up to the fact that this asset is working and it's still early in the game, said one of the knowledgeable individuals. This has made them think about their role.
Clearly the content companies would prefer to sell Hulu to a player they know well and who plays by the rules of the entertainment universe; that is most likely to be Dish Network, a satellite tv company.
The content owners want to be sure that any new owner will build the company and create a bulwark against the rising force of Netflix.
Meanwhile, Google -- a player from a very different culture -- has indicated its willingness to pay significantly (up to $4 billion) for the streaming service, but only if the current content deals are extended. Otherwise, Google is not expected to bid at all.
Amazon is also expected to bid. Yahoo has not formally withdrawn, but the portal is itself on the auction block and in a state of uncertainty since the departure of CEO Carol Bartz.
One person knowledgeable about the owners' thinking said that unless bids for the company under its current content deals come in at $2.5 billion and above, the discussion will be difficult, and a sale less than likely.
Complicating matters is that both Disney and NewsCorp have the ability to veto any sale. Comcast, because of its merger with NBC-Universal, has no vote at all.
The individual also said there are several wild card candidates who may come in and bid.