There appears to be a race to buy the ABC affiliates owned by Disney. Or maybe not?
That’s part of the confusion stemming from a flurry of development around those eight stations. Nexstar, which owns a large number of local stations, expressed its interest, while Allen Media Group also put in an even more aggressive bid for the stations, the ABC Network and a few cable channels. Disney, meanwhile, has said no decision has been made about whether they’re even for sale.
The stations were in the spotlight over the last few weeks after Charter Communications’ Spectrum and Disney initially couldn’t come to a distribution agreement, leading to a blackout affecting ESPN, The Disney Channel, and those eight ABC stations in many major markets. Disney and Charter struck a deal on Monday.
The situation has left the future of these ABC stations up in the air, so here’s everything we know so far.
What are the ABC stations owned by Disney?
Disney owns eight stations, all in some of the biggest markets in the country. They are:
- WSL-TV – Chicago
- WTVD – Durham-Raleigh-Fayetteville, North Carolina
- KFSN-TV – Fresno, California
- KTRK-TV – Houston
- KABC-TV – Los Angeles
- WABC-TV – New York
- WPVI-TV – Philadelphia
- KGO-TV – San Francisco
Doesn’t Disney own all of the ABC stations?
No. A vast majority of ABC stations are known as affiliates and are owned by other companies or run independently. Allen Media Group and Nexstar are two companies that own a host of local stations that are affiliated with the different major networks.
Why does Disney want to get rid of the stations?
It doesn’t – at least not yet. After word of Nexstar’s interest came out, Disney issued a statement squashing the rumors that talks were happening.
“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,” the company said in a statement on its site.
But it looks like Disney has options.
Why do we think Disney wants to sell?
The company has previously said that it would look to sell non-core assets, and the stations are a much smaller part of its traditional TV business, which focuses on cable channels like ESPN, FX and The Disney Channel. In the fight with Spectrum, it almost felt like the ABC stations were collateral damage, with all of the focus on ESPN.
Disney is also in a tough spot financially. Its bet on streaming services hasn’t paid off like it wanted to, and continues to cost a lot of money. Selling these assets would generate some badly needed cash to fund other operations.
What has Nexstar said?
Longtime Nexstar executive Tom Carter, who in August stepped down as president and chief operating officer and now serves as an advisor to the CEO, said a deal would be possible.
“ABC’s portfolio of stations is modest,” Carter said during an investor conference hosted by Bank of America. “It’s only eight, largely in the top 10 markets. We’re in eight of the top 10 markets already with a CW station. We could buy a second station in that market and not increase our household footprint. There may be a few stations that would require divestiture of either a Nexstar station or an ABC station, but we could onboard those with relatively little friction.”
A deal with Disney would cement Nexstar’s leadership in the local broadcasting industry, although there are questions about whether it could even do a deal, despite Carter’s comments. The company owns roughly 160 local stations.
Why is that?
There are government regulations preventing companies from owning too many local stations – particularly in the same market. The rules are in place to prevent any anti-competitive behavior and to stop any one media company from having too much influence over local coverage.
The broadcasters can’t be happy about that.
They’re not. Earlier this week, Curtis LeGeyt, CEO of the National Association of Broadcasters, testified during a House committee hearing on the video business that these companies should be free to scoop up more local stations in order to get the scale needed to compete with the likes of Google or Meta.
What about Allen Media Group?
Allen Media Group has placed a bid of $10 billion for the ABC Network, FX, National Geographic and the eight stations, according to Bloomberg. Allen Media Group has confirmed to Cord Cutters News that it did indeed make an offer.
Allen Media Group was founded by Byron Allen. The company owns The Weather Channel, Local Now, 36 affiliate stations and a number of other media sites.
The company made the deal with the assumption that the networks generate $1.25 billion in earnings before interest, taxes, depreciation and amortization.
Didn’t Allen Media Group try to buy something else?
Yes. It attempted to buy BET from Paramount+ earlier this year, but the talks fell through.
Would a deal prevent another blackout?
Not necessarily. Keep in mind that Nexstar is in the middle of a dispute with DIRECTV that has resulted in all of those local stations going dark since July. While both sides have cited progress in the negotiations, those stations remain unavailable to DIRECTV customers.