In the past few days, there have been many reports that Disney has been in early talks with Nexstar about potentially buying some of Disney’s linear channels, including local ABC Stations.  This follows comments from Disney CEO Bob Iger earlier this summer about them looking into different options for their linear channels, since they don’t view them as core to their business.

Disney released a statement on Thursday in response to media reports regarding its linear businesses:

“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.”

Since that statement was made, Bloomberg has revealed that Byron Allen has made a $10 billion bid to buy Walt Disney’s ABC Television network and assets, including the FX and National Geographic cable channels.  The Allen Media Group already owns some ABC local channels in Alabama, Oregon, and Wisconsin, along with other local networks with CBS and NBC.  If his bid was successful, he may be required to sell some of those local stations that aren’t affiliated with ABC.

This offer is still only in the preliminary stages and could change.  The offer is apparently based on the assumption that the channels would generate $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.

It should be noted that Allen Media already has lots of debt from previous acquisitions and has a number of failed attempts to purchase other networks such as BET and Tegna Inc.

Once Disney’s CEO Bob Iger spoke about potentially selling some of their linear networks, it’s likely many companies like Nexstar and Allen Media started investigating a potential purchase.  It’s worth noting, that Disney currently only owns about 8 local television stations that carry ABC, out of over 250 channels that operate across the United States.  So Disney could sell those channels, which can be found in Chicago, Fresco, Los Angeles, New York City, Houston, Philadelphia, San Franciso and Raleigh.

Bob Iger has previously stated that he isn’t looking to sell the studios that create the content, just the linear channels that broadcast the shows.  With Disney looking to clear out some debts from the purchase of 20th Century Fox and the impending purchase of Comcast’s stake in Hulu, selling some stations could help fix that hole in the budget.  And if there are two interested parties in the channels, it will help Disney get a better price for them.

Do you think Disney should sell some ABC stations to Nexstar or Byron Allen?  Let us know on social media!

Roger Palmer

Roger has been a Disney fan since he was a kid and this interest has grown over the years. He has visited Disney Parks around the globe and has a vast collection of Disney movies and collectibles. He is the owner of What's On Disney Plus & DisKingdom. Email: Roger@WhatsOnDisneyPlus.com Twitter: Twitter.com/RogPalmerUK Facebook: Facebook.com/rogpalmeruk

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