Comedian and media mogul Byron Allen has offered $10 billion to buy Walt Disney’s ABC TV network, local stations, FX, and National Geographic cable channels, a spokesperson for Mr. Allen said on Friday.
The $10 billion figure reflects a multiple of eight times EBITDA, and Mr. Allen would adjust his proposed price based on actual financial performance, according to the publication.
“It’s not a complete surprise to see this bid come in from him,” said Liz Miller, president and founder of Summit Place Financial Advisors. “We’ve seen him before and recently over the past year or so, a bid for broadcast assets. He’s clearly looking to build his own media empire with those broadcast assets.”
This move follows a trend of media consolidation, as Mr. Allen, a standup comic turned media tycoon, has been actively expanding his media portfolio. In recent years, he has invested over $1.3 billion in acquisitions, including the Weather Channel and multiple local TV stations across the United States.
The offer comes after Disney CEO Bob Iger said in July the company was open to selling some of its traditional TV assets, which have struggled for years owing to the rise of streaming services. The company has since reportedly been in discussion with potential buyers including local broadcaster Nexstar, according to Bloomberg.
However, Disney has yet to publicly acknowledge any offer.
“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 Sept. 14 statement.
In a recent earnings report, the company’s streaming operation reported $512 million in losses, bringing total streaming losses to more than $11 billion since Disney+ was introduced in 2019. Disney was continuing to lose money across the board from its declining linear TV business, its faltering new streaming service, multiple failures at the box office, and falling parks attendance, after an initial post-COVID-19 pandemic surge.
“Disney, at its core, has always been a creative content company and a leading creative content company. The advance of streaming and then the challenges with the legacy broadcast assets have really taken the focus off where Disney believes its own strength is and where it’s really worked its own strength in the past,” Ms. Miller added.
Disney’s TV subscribers have been declining at a 6–7 percent rate, which has taken a toll on advertising and affiliate revenue. The company’s streaming service, Disney+, saw a massive surge in cancellations for the first time after raking in millions of viewers over the past few years.
“From our point of view, Disney has problems across just about every one of its businesses,” Brandon Nispel, KeyBanc capital markets analyst, told MarketWatch.
The company saw $2.65 billion in restructuring losses in the quarter owing to the removal some content from its streaming services, termination of licensing agreements, and $210 million in severance payments to laid-off workers.
