It’s home to the most-watched morning and evening news broadcasts, but ABC News may no longer call The Walt Disney Company its home.
The media conglomerate has reportedly held exploratory talks with potential suitors over a sale of the ABC television network and other assets, including the FX and National Geographic networks.
Local broadcast media titan Nexstar Media Group, Inc. and media mogul Byron Allen are the two suitors who have so far been mentioned as those interested in purchasing these linear assets. Talks with Nexstar have been termed as “preliminary,” while Allen’s Entertainment Studios is said to have put in a bid of $10 billion, with financing coming from banks and private equity firms.
According to Bloomberg, Disney says it had made no decisions about whether to divest its flagship broadcast network, “but is exploring its options.” Disney and Nexstar reportedly haven’t even discussed numbers.
News of ABC potentially no longer being part of the Disney empire has rattled employees of ABC News, some of whom, according to CNN’s Oliver Darcy, are experiencing feelings of “dread and trepidation” over the rumored divesture.
This news comes after Disney CEO Bob Iger, in an interview with CNBC in June, remarked that the company’s linear TV assets as not being “core business” to the company.
“Yeah, there’s clearly creativity and content that they create that is core to Disney, but the distribution model, the business model that forms the underpinning of that business, and that has delivered great profits over the years, is definitely broken,“ Iger said at that time. “And we have to call it like it is, and that’s part of the transformative work we’re doing.”
Iger’s comments set off alarm bells all across ABC News as fears set in over whether the news division would still be able to operate as is, considering that the new owner may not have the deep pockets of Disney and may not commit to ABC News’ editorial independence.
Disney has said that these networks are not for sale at this time, but they are “open to considering a variety of strategic options for our linear businesses.” Iger, it has been reported, will also meet with ABC News staff next week in New York in an effort to calm nerves.
ABC has been part of the Disney family since 1995, when it was purchased for $19 billion.
Allen’s Entertainment Studios operates The Weather Channel, The Grio, and several local TV stations, and in partnership with Sinclair Broadcast Group, operates the Bally Sports regional sports networks.
Nexstar, on the other hand, is the largest owner of local television stations in the U.S., with over 200 broadcast stations in 116 markets, many of which are affiliated with ABC. There are also eight ABC Owned Television Stations, many of which are the most-watched in their respective markets. The Texas-based Nexstar has branched out of the local station business in recent years, having recently acquired a majority stake in broadcast network The CW. It also owns the upstart cable news network NewsNation, and the political publication The Hill.
One company totally dominating the local broadcast business, not to mention owning two different broadcast networks, probably wouldn’t be looked at all that favorably by regulators and the FCC. Some divestures would undoubtedly need to be made if such a deal would have any shot at getting greenlit.
Should Nexstar end up acquiring ABC, it will theoretically be able to use the news muscle of ABC News to juice up NewsNation. That could make for an interesting reunion of former ABC News talent and executives, including NewsNation’s Chris Cuomo, Elizabeth Vargas, and president of news Michael Corn.
But again, this is very early days.
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Additional reporting and analysis from A.J. Katz