
MediaPost reported Media Mogul Byron
Allen made a $10-billion bid to acquire Walt Disney
properties including the ABC TV network, the FX and National Geographic channels, and local TV
stations. Hmmm, is Allen banking on acquiring an extra $10 billion soon?
Byron Allen
Bids $10B For ABC, Other Disney Nets
By Karlene Lukovitz
Media
entrepreneur Byron Allen has made a $10-billion bid to acquire the ABC TV
network, the FX and National Geographic channels and local TV stations from
Walt Disney, a spokesperson for Allen confirmed.
Allen’s
Entertainment Studios owns 10 HD television networks, including The Weather
Channel, Comedy.TV and several other verticals, and also produces and
distributes shows, and sells advertising for 43 broadcast and cable TV
programs.
Allen’s
bid for the Disney assets is reportedly based on an eight-times multiple of
estimated earnings before interest, taxes, depreciation and amortization for
the Disney linear businesses.
Disney
has also held exploratory discussions with regional TV power Nexstar Media
Group, according to multiple reports.
Nexstar
has not commented on those reports. However, on Wednesday, during a Bank of
America Securities conference, Tom Carter, a former Nexstar president who now
advises its CEO and board, confirmed that Nexstar is interested in
acquisitions, and mentioned Disney as a potential seller. But he added that
Nexstar doesn’t know “what Disney wants to do.”
Disney,
which has reportedly also considered selling a stake in ESPN, did not comment
on the reports about Allen or Nexstar specifically, stating instead that while
it is “open to considering strategic options for its linear business,” it has
not yet made a decision about selling any of those assets.
Disney
CEO Bob Iger raised the possibility of Disney selling off some networks in a
CNBC interview in July.
“There
clearly is 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 delivering great profits over the years — is definitely
broken, and we have to call it like it is,” he said.
“Given
the low valuations attached to standalone linear networks, it isn’t clear that
there is an accretive move to be made here,” senior research analyst and
MoffettNathanson co-founder Michael Nathanson wrote in a note at the time.
“Simply exiting bad businesses at any cost might be the price you pay to limit
management and investor distractions in the long run.”
The
stock prices of Nexstar, Tegna and E.W. Scripps, which had all declined since
Iger’s remarks, rose on Thursday after the reports of sale discussions.
Disney
acquired Capital Cities/ABC for $19 billion in 1995, when Michael Eisner was
CEO.
In
addition to its national network, ABC has eight owned and operated regional TV
stations and 240 affiliate stations.
Nexstar
owns 200 stations in 116 markets and the 24-hour cable news channel NewsNation,
and would likely have to divest at least some properties in order to stay
within federal TV ownership limits if it struck a deal to buy the Disney linear
networks. Such a deal might also face opposition from Disney rivals that have
affiliate station deals with Nexstar, including Comcast and Paramount.