The future of one of the Big Three television networks has a future that is very much in question. Disney CEO Bob Iger has made comments in the past that have indicated that selling off ABC, as well as other Disney linear networks, is something that he might entertain. And despite the fact that Disney is making it clear that no decision has been made, if it wants to sell, it has a potential buyer in media mogul Byron Allen.
Bloomberg reports that Byron Allen, who owns the Weather Channel as well as several local TV stations, has made an unsolicited offer to Disney to purchase ABC, FX, and Nat Geo for the sum of $10 billion. This comes following a report that Disney had been in talks with Nexstar, owner of The CW, and 200 local stations around the U.S. The report led to Disney sending out a press release to make it clear that “no decision” had been made regarding divesting ABC or any other properties.
However, the same press release said Disney was “open to considering a variety of strategic options,” so the possibility of a sale remains. Back in July Bob Iger first indicated that selling ABC was at least possible, calling the business model of linear television “definitely broken.”
The fact that traditional television is struggling might have meant that there wouldn’t be much interest from other companies in purchasing ABC, but Allen’s offer and the alleged conversations with Nexstar indicate that there may actually be a few places interested in picking up what Disney might be interested in selling. Even if the Mouse House isn’t looking to sell in the short term, the right offer might become too good to refuse.
A source for Bloomberg called the offer “preliminary” so if Disney actually shows interest, it sounds like there is room for negotiation. Allen may also be willing to sell off the non-ABC local stations that he owns in order to prevent problems with the other networks.
Advertising revenue from traditional television is certainly on the decline, and Disney and other media companies have shifted to focus on streaming, specifically, ad-supported streaming, which can potentially replace the lost ad revenue from traditional platforms. Disney specifically has been promoting the ad-supported tier of DIsney+ hard and has made it clear it wants consumers to use that platform over the ad-free version.
However, while the ad revenue may be shrinking, there is another side of the issue because the content these networks produce is pretty important to Disney. Nat Geo is one of the pillars of Disney+ and FX is a big part of Hulu, which Disney owns most of, and may be getting ready to purchase the rest of very soon. The timetable for Disney and Comcast to make a deal there recently moved up. Selling off the networks doesn’t mean a deal can’t be made to retain the content, but that would become a new expense Disney would need to pay.
It’s somewhat ironic that Bob Iger, who became part of Disney when Michael Eisner led the company to purchase Capitol Cities/ABC, might be the man who separates the two powerhouse names. But what’s clear is that the media landscape is in a period of upheaval, and in a few years it’s unlikely that the way we consume film and TV is going to look much like the way it was just a few years ago.