Disney is exploring the possibility of selling its ABC network, which includes a national TV network and eight local stations, to Nexstar Media, a local TV station owner with a market value of $5.25 billion, according to sources familiar with the matter.
The talks are still in the early stages and no deal is imminent according to the New York Post. Disney is also in contact with other potential buyers, as well as investment banks and private equity firms, to gauge the interest and value of its ABC assets.
The media mogul, whose stock has been trading at its lowest level since 2014, has indicated that it wants to exit the traditional TV business and focus on its streaming services like Disney+, Hulu, and ESPN+.
In July, Disney CEO Bob Iger said that the company could divest some of its legacy TV assets that have been losing viewers and advertisers to online platforms.
However, Iger later backtracked on his remarks and reassured the senior executives of Disney’s TV group that he valued their business and ABC News, The New York Post reported.
The media giant is now reviewing its portfolio and considering whether it could bundle some of its other TV channels with ABC to make it more attractive to potential buyers.
{{/usCountry}}The media giant is now reviewing its portfolio and considering whether it could bundle some of its other TV channels with ABC to make it more attractive to potential buyers.
{{/usCountry}}For instance, ABC could be packaged with the Disney Network and FX, which would increase the sale price and offer more diversity for buyers who are looking for TV properties.
ABC is one of the oldest and largest TV networks in the US, with shows like ‘Dancing with the Stars’ and ‘The Bachelorette’. It also has affiliation agreements with about 240 local TV stations reaching almost all US television households. Disney acquired ABC in 1995 for $19 billion from Capital Cities/ABC.
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.
However, a deal would also face some regulatory challenges for Disney, the sources said. The Federal Communications Commission has strict rules on media ownership and market concentration. For example, it recently blocked a deal between Standard General and Tegna, two media companies, due to antitrust concerns.
“The last thing Iger needs is a deal that gets blocked,” one insider stated.