Newsmax Inc’s Hulu+ Deal: A Strategic Move with Multi-Year Potential?

The recent multi-year distribution agreement between Newsmax Inc and Hulu+ Live TV marks a pivotal moment for the conservative media outlet. By securing carriage on one of the largest streaming platforms, Newsmax aims to expand its reach to 60 million U.S. households—a move that could solidify its position as a top-tier cable news network. But what does this partnership mean for investors? Let’s dissect the financials, risks, and opportunities.

The Deal’s Terms: A $18 Million Gamble on Growth

The agreement, effective March 2023, spans three years, with total value reaching $18 million. An upfront payment of $9 million was made at signing, followed by two annual installments of $4.5 million each. This structure ensures steady cash flow for Newsmax while Hulu+ gains exclusive access to its content during the contract term. The exclusivity clause is critical: Newsmax cannot distribute its channel on competing platforms until 2026, locking in Hulu+ as its primary streaming gateway.

The strategic bet here is clear: leveraging Hulu+’s subscriber base to grow viewership. With 33 million regular viewers already across linear and streaming platforms, the Hulu deal could push this figure higher, potentially unlocking ad revenue and subscription-based opportunities. However, success hinges on retaining Hulu+ subscribers and outperforming rivals like One America News Network (OANN), which currently trails Newsmax in ratings.

The Stock Offering: Fueling Expansion or Overextending?

In March 2025, Newsmax announced a Regulation A+ offering to sell 7.5 million shares of Class B Common Stock at $10 per share, raising up to $75 million. The funds will likely support content production, technological upgrades, and further distribution deals. However, the offering carries risks. A 6.265% commission to the Selling Agent (Digital Offering, LLC) reduces net proceeds to ~$70.3 million, and the “best efforts” structure means shares might not sell out.

Investors should also note the escrow process: funds remain frozen until closing (initially March 31, 2025), with no interest accrued. If the offering fails, investors get their money back—but Newsmax loses access to much-needed capital. The stock’s current performance offers a hint at investor sentiment:

The Viewership Advantage: A Double-Edged Sword

Newsmax’s claim of 33 million regular viewers—including 15 million on linear and streaming—positions it as the fourth-largest cable news network, trailing only Fox News, CNN, and MSNBC. This scale is vital for attracting advertisers, as larger audiences command higher rates. However, the Hulu+ deal’s exclusivity could backfire: if Hulu+ subscribership declines, Newsmax’s growth stumbles. Conversely, if Hulu+ grows, Newsmax benefits disproportionately.

Risks on the Horizon

1. Regulatory Scrutiny: The stock offering must comply with SEC regulations, and any discrepancies in the Final Offering Circular could delay or halt the deal.
2. Content Competition: Hulu+’s library includes mainstream networks; Newsmax must differentiate itself to avoid being a “niche” add-on.
3. Subscriber Retention: Hulu+’s parent company, Disney, has struggled to retain subscribers in recent years. If churn rises, Newsmax’s viewership gains could evaporate.

Conclusion: A High-Reward, High-Risk Play

Newsmax’s Hulu+ deal is a bold move that could redefine its financial trajectory. With a three-year, $18 million contract and a stock offering aimed at raising $75 million, the company is betting on scale to drive profitability. Its existing 33 million viewers and the Hulu platform’s reach provide a solid foundation. However, execution risks—including regulatory hurdles, Hulu+’s subscriber health, and competitive pressures—loom large.

Investors should weigh the potential for exponential growth against the volatility inherent in media distribution. If Newsmax can convert Hulu+ subscribers into loyal viewers and advertisers, the stock could see significant upside. But missteps in content, distribution, or capital management could leave shareholders stranded. For now, the deal signals ambition—a necessary trait in today’s cutthroat media landscape. The question remains: Can Newsmax execute the vision? The next 18 months will tell.