Byron Allen Offers $10 Billion for Disney’s ABC, FX and National Geographic
Media mogul Byron Allen has made a $10 billion bid to purchase Disney’s ABC television network and local stations and the FX and National Geographic cable channels, a spokesperson for Allen told TheWrap Friday.
Allen is the founder of Allen Media Group, which owns 27 ABC-NBC-CBS-FOX network affiliate broadcast television stations in 21 U.S. markets. It also operates 12 24-hour HD television networks serving nearly 300 million subscribers, including The Weather Channel, The Weather Channel en Español, Pets.TV, Comedy.TV, Recipe.TV, Cars.TV, ES.TV, MyDestination.TV, Justice Central.TV, The Grio Television Network, This TV and Pattrn.
As Bloomberg first reported, the offer is based on the assumption that the properties generated $1.25 billion in earnings before interest, taxes, depreciation and amortization over the past 12 months. Allen would change the proposed price, which is based on a multiple of eight times EBITDA, if that number is higher or lower. Allen would work with banks and private equity firms to finance an acquisition and could potentially sell local TV stations that aren’t affiliated with ABC to avoid friction.
The offer comes after Disney CEO Bob Iger told CNBC in July that those linear television assets “may not be core” to the company, suggesting he would be open to a possible sale.
“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,” Disney said in a statement on Thursday as speculation of sale talks ramped up.
In addition to Allen’s offer, Bloomberg reported that Disney has had “exploratory,” “initial” discussions with Nexstar Media Group regarding a potential sale of ABC.
Nexstar currently owns America’s largest local broadcasting group with 200 owned or partner stations in 116 U.S. markets reaching 212 million people. Nexstar’s portfolio includes ABC, CBS, NBC, Fox network affiliates and The CW.
While the company is already at the Federal Communications Commission’s 39% cap on station ownership by one company, Nexstar senior advisor Tom Carter argued that it would not preclude the company from buying stations.
“ABC’s portfolio stations is modest. It’s only eight, largely in the top 10 markets. We’re in eight of the top 10 markets already,” he explained during an investor conference hosted by Bank of America on Wednesday. “So 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 – either a Nexstar station or an ABC station – but we could onboard those with relatively little friction.”
However, he pointed out that there are a lot of questions that would need to be answered, including how Disney’s intertwined programming for linear and streaming such as ESPN simulcasting sporting events on ABC would work going forward.
“I don’t know if there’s a deal to be done there because I think they’ve got to be a little bit clearer in their own thinking with regard to how that goes,” Carter added. “We can take direction, but we’re not necessarily out there leaning into any of this stuff without a clear path.”
A Nexstar spokesperson declined to comment.
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