UPDATED with details of Byron Allen bid. As Deadline reported Thursday, Byron Allen is interested in Disney’s linear TV assets, and overnight that interest progressed to a formal offer.
Sources familiar with the discussions said Allen late Thursday offered $10 billion for ABC, Disney’s eight local TV stations, FX and the National Geographic Channel. Bloomberg and Reuters are among the media outlets reporting the official offer.
The offer is pegged at eight times EBITDA, but it uses estimated financials and could be adjusted, sources said. Strategically, the notion of removing FX and Nat Geo — both of which are embedded within Disney streaming outlets Hulu and Disney+ — from Disney control raises a number of questions. But the Charter carriage renewal earlier this week, which left networks like Freeform and FXX without distribution on the No. 2 pay-TV service in the U.S., indicate the climate change in the media business.
Allen joins Nexstar in being interested in Disney’s linear TV assets, which CEO Bob Iger said in July “may not be core” to the company. That comment set off a wave of interest from a range of parties, including private equity firms.
Disney issued a statement on Thursday afternoon pushing back on reports it had held talks about ABC and the stations, saying the company had “made no decision” on the matter but was keeping its “strategic options” open.
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Disney is pushing back on reports that the company is talking with Nexstar Media Group about a potential sale of ABC and its eight local ABC stations.
Chatter is continuing however, especially in light of comments by Tom Carter, a former Nexstar exec who is now a senior advisor to the CEO and board of directors. Speaking at a BofA Securities conference in New York on Wednesday, Carter said Nexstar could acquire the ABC stations with “little friction.” He did not say talks were happening and in fact noted that Disney has not clarified what it intends to do with the linear TV assets that CEO Bob Iger has said “may not be core” to the company.
“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,” a Disney spokesperson said in a statement provided to Deadline.
There has no formal dealbook circulated or formal process initiated in the wake of Iger’s comments, sources have told Deadline. The carriage renewal reached with Charter this week, which saw eight networks jettisoned from Spectrum cable TV systems, indicates the state of linear networks and Disney is apt to ramp up efforts to rearrange those assets in the corporate fold.
Nexstar declined to comment Thursday when contacted by Deadline.
The list of interested suitors for Disney linear holdings includes Allen Media Group, according to a person familiar with the discussions. The company has taken part in a number of M&A deals in recent years, buying the Weather Channel and bidding for BET before Paramount paused the process of seeking minority stakeholders in it.
Iger delivered his remarks about linear assets to CNBC in July during the Allen & Co. conference in Sun Valley, ID.
Given that Nexstar has grown via dozens of M&A deals to become the largest owner of local TV stations in the U.S., acquired control of The CW and has a strong balance sheet, there is a logic to the notion it could be in a position to buy select Disney assets. A person familiar with the company’s thinking said the two companies have had on-and-off discussions over the past three years, though the talks have never heated up to a full negotiation.
