Disney CEO Bob Iger’s talks to sell the ABC Network may be “greatly exaggerated.”
That’s according to the New York Post, citing an anonymous investment banker briefed on the talks, who said that “everyone is way ahead of their skis on this story” and that “they don’t know what is happening here.”
Over the summer, Iger said he would be open to selling some of the company’s local ABC stations. Since then, media companies like Nexstar and Allen Media Group have been reported as potential buyers, although Disney hasn’t decided whether the stations are for sale at all.
“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 last week.
The chatter, however, underscores the tumultuous situation Disney finds itself in, with the company feeling to heat make some changes after its big bet on streaming has blown up with continued losses, and cord cutting squeezing the amount of traditional pay-TV revenue it gets. Following its spat with Spectrum, which was settled last week, Disney may face similar issues with other cable companies.
But it’s clear Disney has options if it decides to sell ABC, but they might not be the options Iger is reportedly hoping for. The New York post said skeptical insiders think Iger is waiting on a “deep-pocketed bidder,” but such a buyer is unlikely to come forward.
Disney owns eight ABC stations in some of the biggest markets in the U.S. like Chicago, California, Houston and New York. Potential buyer Nexstar is the largest owner of local ABC, CBS, FOX, & NBC stations and has been rapidly expanding its presence — most recently by acquiring The CW network of stations. Striking a deal with Disney would further elevate Nexstar as a power player in local television, although it’s unclear if regulators would allow such a move.
The increase in cord cutting has hit TV networks hard, and Disney isn’t an exception. When reports of the talks to sell ABC began, Disney was in the middle of massive cost-cutting efforts. The company had been shutting down some networks around the world in an effort to drive Disney+ subscriber growth.
Disney+ hasn’t paid off in the way the company had originally hoped and selling off ABC assets could ease some of the financial strain.