Media mogul Byron Allen has made an offer of $10 billion for Disney’s ABC Network. According to Bloomberg, Allen made the offer as Disney is looking to shed what it considers “non-core assets” and looks to focus their efforts on streaming services.
According to a Bloomberg source familiar with the offer, the offer centers on ABC’s broadcast network as well as FX and National Geographic. Other sources also claim that Disney has been in contact with Nexstar Media Group about selling the ABC network and its local news affiliates, but nothing concrete has emerged as of yet.
Disney released a statement on Sept. 14, saying that no sale has yet been made, but the company also did not rule out the possibility of a sale, echoing statements from its CEO, Bob Iger, in July 2023.
The statement reads: “While we are open to considering a variety of strategic options for our linear businesses, at this time The Walt Disney Company has made no decision with respect to the divestiture of ABC or any other property and any report to that effect is unfounded.”
There has been speculation, fueled by statements made by Iger, that indicates Disney is looking to get out of TV assets that investors have largely come to regard as dead weight.
“We are expansive in our thinking about [the linear business], and we’re going to look expansively … [for] opportunities there because, clearly, it’s a business that’s going to continue to struggle,” the Disney CEO said in an interview with CNBC in July. Iger acknowledged the current distribution modelis “definitely broken,” saying that linear TV assets “may not be core” to Disney’s strategy any more. His perspective aligns with the industry’s evolving perception due to the rapid surge in consumer streaming consumption.
Although Allen is one of the media industry’s power players, he began his career as a standup comedian before getting into producing TV shows, mostly of the daytime courtroom variety. According to IMDB, Allen has 16 writing credits and directing credits. Allen has spent the last several years acquiring brands like The Weather Channel and regional stations across the U.S. Allen was one of the names associated with the attempted purchases of BET and Tegna Inc.
Even though Allen’s offer of $10 billion for the Disney assets is preliminary, the offer is currently based on models that assume that the ABC brands Allen is interested in purchasing will net him $1.25 billion before interest, taxes, and depreciation factor in. If that number changes, Allen has the flexibility to change his offer to reflect these changes. Allen will reportedly work with banks and equity firms to complete the deal, according to Bloomberg’s source. Allen could also look to sell some of the regional stations he owns that are not ABC affiliates so there is not a conflicting issue with networks like CBS and NBC.
The Allen Media LLC reportedly does carry a significant amount of debt, and that could be something that affects whether or not Disney chooses to sell to Allen.
Industry analysts like Evan Young believe that Disney’s willingness to sell is an indication that it believes traditional TV is about to fizzle out, which could lead to it being sold at a fraction of its current value. Young noted “a sale of ABC tells us that Disney’s view on pay TV is that it will soon implode, which to us means applying meaningful discount rates to all linear cash flows.”
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