There are talks that Disney is selling ABC to Nexstar Media. TOPLINE Entertainment behemoth Walt Disney has held exploratory discussions on selling ABC and other TV networks to local broadcaster Nexstar Media Group. The reason for Disney selling ABC is the latest development in Disney’s efforts to offload its linear television assets.
The talks are still in a preliminary phase and haven’t yet provided a specific valuation, one of the people. An acquisition could have complications as ABC shares broadcasts with other Disney-owned networks like ESPN. As per report, Nexstar is only interested if it gets what it considers a good price.
Disney selling ABC talks still preliminary
ABC’s programming includes popular series like Grey’s Anatomy and General Hospital, its national news programming as well as reality television like Dancing With The Stars and American Idol.
On reports of Disney to sell ABC, the response by the company was a denial that it has reached a deal. In a statement published on its website, the company says its “open to considering a variety of strategic options,” but it hasn’t made an official decision and that “any report to that effect is unfounded.”
As per sources tell the talks between Nexstar and Disney to sell of ABC are still early and that a price hasn’t yet been named. Another source tells that Disney is also considering selling ABC to Byron Allen, the CEO of Entertainment Studios, which owns several stations, such as The Weather Channel.
Why Disney wants to sell ABC?
Disney CEO Bob Iger said during an interview with CNBC in July that the company was looking to sell off many of its properties in linear television including ABC as the traditional television viewing style involving channels with scheduled programming lineups stating the properties “may not be core to Disney.” Iger, who rose up the ranks of Disney after being an executive at ABC, called the linear television business model “definitely broken.” Meanwhile, Nexstar has been on the hunt for legacy media properties. During a presentation at a Bank of America Securities conference Wednesday, Tom Carter, Nexstar’s former president and now an adviser to its CEO and board, said the company was looking to purchase assets from large media companies that are trying to restructure.
Disney moving away from traditional linear TV
Disney selling ABC comes amid a transformational period for the television and entertainment industry. Netflix, Disney+ and other streaming services overtook traditional linear TV as the most common way viewers watched television in July 2022, according to data from Nielsen. In June, PwC predicted the linear television industry will lose $30 billion in subscription and advertising revenue by 2027, as more viewers cut cable and switch to streaming. Disney launched its streaming service Disney+ in November 2019 and is in the process of purchasing Comcast’s 33% stake in Hulu, which, because the company already owns the other two-thirds of the platform, would give it full control over the streaming service. That deal is slated to be completed September 30.
Nexstar’s large numbers
Nexstar is the largest owner of local TV stations in the US, with 200 owned or partner stations in 116 markets reaching over two-thirds of the US population. It also operates national TV networks such as CW and NewsNation. A deal with Disney would expand its reach and content portfolio.
Challenges for Disney
If Disney is to sell ABC, the deal would also face some regulatory challenges for the company, as per the sources. The Federal Communications Commission has strict rules on media ownership and market concentration. It recently blocked a deal between Standard General and Tegna, two media companies, due to antitrust concerns.
