Disney Has Reportedly Discussed Selling ABC to Nexstar; Byron Allen Lodges $10 Billion Bid for Disney Channels
Bob Iger’s vision for the future of Disney is quite clear by now. The parks and merchandising segment of the company will continue on much as they have for decades, but the entertainment side of Disney is to be led by its streaming platforms Disney+ and Hulu (and likely an eventual combination of the two), as well as by the new ESPN standalone streaming service that Disney plans to offer by 2025 or 2026.
That won’t leave much room in the budget for Disney’s linear channels, which is why Bloomberg is reporting that the company has had preliminary talks with Nexstar, the largest owner of local broadcast stations in the country, regarding a sale of ABC. There hasn’t been a discussion of price yet, but Nexstar would reportedly be interested if the numbers line up.
Weather Channel owner Byron Allen of Allen Media Group has also thrown his hat into the ring. Another report from Bloomberg states that Allen has made a $10 billion bid for ABC, FX, and National Geographic. Allen was also an active bidder for BET when Paramount was considering selling that brand earlier this year, so it’s clear he’s got acquisition on the brain these days.
In a statement, Disney said that while it’s keeping its options open regarding its broadcast and cable channels, it has made “no decision with respect to the divestiture of ABC or any other property.”
Despite that statement, ABC audiences should think of a sale of the network by Disney as highly probable. When word of the possible sale of Disney-owned TV channels first arose in July, it was due to comments from Disney CEO Bob Iger, who said that linear TV was a “no-growth business” and that Disney’s TV assets were not necessarily “core” to the business.
Why is Disney looking to sell off TV channels that have been under its corporate umbrella for decades? As mentioned, the company is looking to make its streaming arm its main source of entertainment. It also wants to create a streaming version of the full ESPN channel suite, and the expense of that process has also led the company to seek partners to become minority shareholders in that service going forward.
This is also partially why Disney was so reluctant to give into Spectrum’s demands that its customers be granted access to Disney+ as part of their cable subscription in the recent carriage dispute between the two companies. Spectrum argued that Disney putting more premium content behind the streaming paywall was unfair to customers who were already paying to get Disney-owned channels, while Disney’s internal beliefs about the impending demise of cable made it hesitant to agree to any deals that might slow that demise. Ultimately, Disney gave in to Spectrum in order to restore 19 of its cable channels to Spectrum airwaves, as Iger’s company still counts on carriage and retransmission fees to pad the bottom line.
All talks around the sale of ABC have been preliminary thus far, and there are still lots of details to be sorted out, such as the fate of sports programming now shared by ABC and ESPN. Nexstar has an ongoing retransmission dispute with DIRECTV to settle as well, so audiences shouldn’t expect to see ABC sold to that outlet immediately. But Disney is definitely testing the waters, and gauging what kind of offers it can expect for its linear channels going forward.