The idea of Disney actually selling off ABC seems to be gaining some traction. That had occasionally been mentioned over the past five years or so, but generally only by a few analysts and generally as part of a “Spin off or sell ESPN” package. But once and future Disney CEO Bob Iger made massive headlines on that front with July comments on CNBC that Disney linear networks including ABC “may not be core.” And on Thursday, Bloomberg’s Christopher Palmeri reported that Byron Allen (the comedian and producer who owns wide-ranging business Entertainment Studios, parent of The Weather Channel and more) has made Disney a $10 billion offer for ABC (both the network and the eight owned-and-operated affiliates), the FX networks, and the National Geographic networks:
Media mogul Byron Allen makes a $10 billion offer to Disney to acquire ABC, FX, National Geographic cable channels and local stations https://t.co/o1A5P7TFKS
— Bloomberg Technology (@technology) September 15, 2023
Here’s more on that from that piece:
Byron Allen has submitted a $10 billion offer to Walt Disney Co. to acquire its ABC TV network, local stations, as well as the FX and National Geographic cable channels, according to a person familiar with his proposal.
The offer is preliminary and could change, said the person, who asked to not be identified. Allen is basing his offer on the assumption that the properties generated $1.25 billion in earnings before interest, taxes, depreciation and amortization over the past 12 months. If that number is lower or higher, Allen would change his proposed price, which is based on a multiple of eight times ebitda.
Allen (previously seen in the sports world on a variety of fronts, including with his minority stake in Sinclair’s 2019 purchase of the Fox regional sports networks from Disney, and with his unsuccessful bid for the Denver Broncos in 2022) has his net worth estimated as $800 million by many sites, so this would presumably be a bid he’s leading with financing from a number of partners. But that’s certainly possible; that was the case with his Broncos’ bid, where his investment group was estimated to be offering $3 to $4 billion (the team was eventually sold to the Walton-Penner group for $4.65 billion). A $10 billion offer would take a lot of financing, but there are a lot of groups interested in ABC.
And this Allen offer is not the only one here. Palmeri and colleague Thomas Buckley previously reported Thursday that Nexstar, parent company of The CW and 197 local stations in the U.S., is also in “exploratory” talks with Disney about ABC. That came following comments Nexstar advisor (and former company president) Tom Carter made about the idea at a Bank of America securities conference Wednesday. Granted, that Bloomberg piece described those talks as “preliminary” and included “Nexstar would only be interested at the right price,” so that’s a ways off from Allen’s actual offer, but Nexstar does seem to have some significant interest here as well. (And they definitely have a good amount of money, making $5.2 billion in net revenue last year.) And others may well be interested also if Disney does go ahead with a sale of ABC.
Part of the reason an ABC sale hasn’t drawn much attention over the years is the intense coupling the network currently has with ESPN. Indeed, any idea of Disney selling off ABC before Iger’s July comments was generally from only a few analysts, and generally referenced as part of a package with ESPN. And it got much less talk than all the “Disney will sell or spin off ESPN” remarks from analysts over the years.
Much of ABC’s value is from its ESPN-branded sports broadcasts, including the NBA Finals, Monday Night Football and NFL playoff games (selected simulcasts since 2020, exclusive games beginning this year), the Super Bowl (in 2027 and 2031), the Stanley Cup Final (every two years), college football, and more. And the ability to offer ABC broadcasts has also been vital for ESPN in many of their rights acquisitions, especially in an era of increased cord-cutting and leagues and teams emphasizing broadcast television’s higher reach. So, as Carter said Wednesday at that conference, a lot would have to be figured out on the sports front in particular (and it’s far from clear that Disney has its heart set on selling ABC):
The adviser added that there are some complications to a sale. ESPN, Disney’s sports network, shares many of its telecasts with ABC.
“If you were to buy the ABC complex, how would that work going forward?” he said. “There’s a lot of questions that need to be answered there.”
He also said Nexstar, the largest US owner of TV stations, needs more guidance from Disney on what it wants to do.
“They’ve got to be a little bit clearer in their thinking,” Carter said. “We can take direction, but we’re not necessarily out there leaning into any of this stuff without a clear path.”
It’s far from clear that Disney will actually sell off ABC and these other networks. But if they do, there are definitely interested buyers. And it’s notable to see details emerge on a couple of those. And any ABC sale would wind up with a massive sports impact, whether that’s with an agreement to keep broadcasting ESPN events on ABC even while it’s outside of Disney or with some other path forward.
