Summary:
- Byron Allen offers $10 billion for ABC Network, FX, and National Geographic.
- Disney has not made a decision regarding the divestiture of ABC and other properties.
- Potential buyers for Disney's linear networks include Nexstar Media and Nextar Group.
- Linear networks are no longer a core focus for Disney, which is shifting its focus to film, parks, and streaming.
- Linear TV viewership fell below 50% in July for the first time, while streaming continues to increase.
- Netflix's market cap equals that of Disney, Fox, and Paramount combined, highlighting the importance of streaming in the current media landscape.
Entertainment mogul Byron Allen has reportedly offered $10 billion to buy ABC Network, along with FX and National Geographic, according to Bloomberg. This bid comes as Disney considers strategic options for its linear businesses.
Byron Allen places $10 billion bid for ABC Network and more
Reports suggest that Byron Allen has placed a $10 billion bid to purchase ABC Network alongside the FX and National Geographic networks, according to Bloomberg. The bid comes at a time when Disney, the current owner of the networks, has been considering their options with regards to their linear businesses. However, it's important to note that the talks are only exploratory and no decision has yet been made. In a statement, Disney said it was open to considering strategic options; but added that reports of any decision regarding the divestiture of ABC were unfounded.
Potential buyers for the linear networks
Alongside Byron Allen's $10 billion bid, Nexstar Media Group is also reportedly considering purchasing some of the assets from Disney. However, Nexstar expressed that complications could arise if ESPN is not included in the spin-off due to their shared telecasts with ABC. While linear broadcasting is still considered a profitable high-margin business that funds a lot of Disney's growth initiatives, the rise of streamed content and cord-cutting has led to its decline. This makes the sale of the linear networks a complex and delicate issue for Disney.
Disney's future on broadcast TV
Disney CEO Bob Iger stated that the company will be focusing on three main areas of growth: the film business, the parks business, and the streaming business. The statement indicates that linear networks will not be included in their future plans. As technology advances, linear TV viewership falls and time spent streaming via television increases. Traditional media companies such as Comcast NBC, Paramount CBS and Fox Corporation are struggling with advertising woes and declining viewership. Analyzing market cap, Netflix appears to be worth more than Disney, Fox, and Paramount combined.
Investors put their weight behind streaming services
The rise of streaming services has become a sign of the times. The terrestrial television model is collapsing, and investors are flocking towards streaming services over traditional linear TV. As Byron Allen and Nexstar reportedly compete for ABC, it is clear to see that Disney's future on broadcast TV is uncertain as traditional media companies struggle to compete. The complexities of switching to a streaming model, and the potential for lost revenue in the transition, make it a challenging task for the industry to face.
The decline of linear TV viewership and the rise of streaming services continue to impact the media landscape, and Disney's potential sale of its linear networks is just one example of the complexities facing legacy media companies.