Following the return of Bob Iger to try to fix the many issues facing Disney, the CEO has been making some drastic changes to the company to prepare it for the future, which will be focused on streaming as linear television continues to decline.
Earlier this summer, Bob Iger spoke during an interview with CNBC, saying that he has been looking to make changes to the company and specifically called out the traditional linear business as a side of the company that isn’t growing and that they are being expansive about opportunities with that business, such as potentially selling the channels off, since they are not as important to the future of Disney as they used to be.
They may not be core to Disney. 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 is delivered great profits over the years is definitely broken. And we have to call it like it is and that’s part of the transformative work we’re doing.
As you might expect, following Bob Iger effectively putting a “For Sale” on some of its linear channels, there has been lots of speculation about the future of Disney’s linear television business and who might potentially be a possible buyer.
According to a report by Bloomberg, Disney has been in early discussions with Nexstar about possibly selling some local ABC channels to them. These talks are preliminary and haven’t involved a specific valuation, though Nexstar will only be interested if the price is right.
Disney has also been having discussions with Byron Allen’s Allen Media Group, which owns several Television channels, about an acquisition of the network and its stations.
Only this week at an investor conference in New York hosted by BofA Securities, Tom Carter, a former Nexstar executive, who is now a senior advisor to the CEO and board of directors, has said that Nexstar could easily acquire Disney’s local ABC TV stations. Based on its current earnings, a recent valuation by Bloomberg has valued ABC, along with its local stations, at around $4 billion. The news of a potential sale of ABC has helped lift the stock price of both Nexstar and Disney.
Disney has also issued a public statement on the report that Disney is potentially looking to sell ABC:
“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.”
While the denial of any decision being made about the future of ABC channels isn’t a huge surprise, it still is very vaguely worded, leaving it wide open should Disney decide to sell off some of its assets and legally can’t discuss it now.
Earlier this week, Disney signed a new multiyear contract with Charter Communications to restore a number of linear channels, including ABC, National Geographic, FX, Disney Channel and ESPN, along with Spectrum cable customers getting Disney+ with ads access later this year. However, this new contract saw eight linear networks, including Disney Jr, Nat Geo Wild and FXX, removed from Spectrum cable networks, igniting more speculation that Disney is looking to trim down its linear channels, as it has done internationally.
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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.