Disney fields interest from potential ABC buyers. But ‘no decision’ to sell, company says

Walt Disney Co. has received preliminary interest from potential buyers for its ABC television network and owned TV stations, including from local station operator Nexstar Media Group, according to people familiar with the matter who were not authorized to comment.

Disney Chief Executive Bob Iger has suggested the Burbank entertainment giant is open to exploring deals to spin or sell off its linear television assets, including ABC, as the company focuses its business around streaming, theme parks and studios. Iger has signaled interest in seeking a minority strategic partner for sports cable giant ESPN.

Potential buyers could also include additional media operators and private equity firms, the knowledgeable people said.

But Disney on Thursday said that it had not yet decided to sell ABC and that speculation to that effect was premature.

“While we are open to considering a variety of strategic options for our linear businesses, at this time the Walt Disney Co. has made no decision with respect to the divestiture of ABC or any other property and any report to that effect is unfounded,” a Disney spokesperson said in an emailed statement.

Bloomberg reported earlier Thursday that Disney had held preliminary talks to sell ABC to Nexstar, which is the largest local television operator in the U.S. Nexstar closed its deal to buy the CW network in October 2022. Citing anonymous sources, Bloomberg said talks had not yet addressed a valuation for ABC.

However, sources who spoke to The Times disputed the notion that there have been talks with Nexstar.

A Nexstar representative declined to comment.

Iger first raised the idea of spinning off ABC and its owned stations during a July 13 interview with CNBC. That was widely interpreted as a vote of no confidence in the future of the traditional TV business, which is struggling because of cord-cutting and falling ratings.

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The publicly traded stocks of station group owners Nexstar, E.W. Scripps and Tegna all saw significant declines in their price since Iger’s remarks. All three closed significantly higher (Nexstar 5.5%, Scripps 12.1% and Tegna 3%) on Thursday after the Bloomberg report about sale talks with Disney circulated.

Nexstar already owns 200 stations in 116 markets, including KTLA in Los Angeles and WGN in Chicago. The Irving, Texas, company also owns NewsNation, a 24-hour cable news channel launched in 2020.

Disney’s eight television stations would enhance Nexstar’s portfolio as they have the top-rated local newscasts in several of the country’s top markets, including Los Angeles (KABC), New York (WABC) and Philadelphia (WPVI). The stations reach 23% of the U.S.

ABC carries major sports under deals with Disney’s ESPN, which include two Super Bowls over the next 10 years and the NBA Finals through 2025.

Any deal to sell ABC to Nexstar would probably face significant regulatory hurdles because Nexstar is already at the Federal Communications Commission’s cap for station coverage in the U.S. after its deal four years ago to buy Tribune stations.

Tom Carter, Nexstar’s former president and now an advisor to its chief executive and its board, told investors at a Bank of America Securities conference Wednesday that the company is interested in acquiring assets, pointing out that that was how the company grew into a giant. Carter then cited Disney as a possible seller.

But, Carter added, “We don’t know what Disney wants to do.”

Carter said a deal for Disney’s stations would only require a few divestitures in order to keep the company in line with federal TV ownership regulations. Station owners are limited to stations that cover 39% of the U.S., and Nexstar is already there.

Many of Nexstar’s stations are affiliates of NBC, Fox and CBS. NBC owner Comcast Corp. and CBS parent Paramount would probably object to their stations being owned by a network competitor.

In addition, several pay-TV operators, including DirecTV and Comcast, have filed FCC complaints against Nexstar alleging anti-competitive business practices and violations of federal media ownership rules.

DirecTV filed a federal lawsuit earlier this year in New York alleging that Nexstar had conspired with two other companies to illegally raise retransmission consent fees charged to pay-TV operators.