Walt Disney Co. has received preliminary interest from potential buyers for its ABC television network and its own television 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 indicated that the Burbank-based entertainment giant is open to exploring deals to spin off or sell its linear television operations, including ABC, as the company focuses its business on streaming, theme parks and studios. Iger has signaled interest in finding a strategic minority partner for sports cable giant ESPN.
Potential buyers could include other media operators and private equity firms, the people with knowledge of the matter said.
But Disney said Thursday that it had not yet decided to sell ABC and that speculation was premature.
“While we are open to considering various strategic options for our linear businesses, the Walt Disney Co. has not made a decision regarding the divestiture of ABC or other assets at this time, and any announcement to that effect is without merit,” said a Disney spokesperson said in an emailed statement.
Bloomberg reported earlier Thursday that Disney was in preliminary talks to sell ABC to Nexstar, the largest local television operator in the United States. Nexstar completed its deal to purchase the CW network in October 2022. Citing anonymous sources, Bloomberg said talks had not yet finalized a review for ABC.
However, sources who spoke to The Times disputed the suggestion that there had been any discussions with Nexstar.
A Nexstar representative declined to comment.
Iger first raised the idea of spinning off ABC and its own networks in a July 13 interview with CNBC. This was widely interpreted as a vote of no confidence in the future of the traditional television business, which is struggling due to cord-cutting and declining ratings.
The listed shares of broadcasting group owners Nexstar, EW Scripps and Tegna have all recorded significant price declines since Iger’s comments. All three closed sharply higher on Thursday (Nexstar 5.5%, Scripps 12.1% and Tegna 3%) following the Bloomberg report on sales talks with Disney.
Nexstar already owns 200 stations in 116 markets, including KTLA in Los Angeles and WGN in Chicago. The Irving, Texas-based company also owns NewsNation, a 24-hour cable news channel that launched in 2020.
Disney’s eight television stations would enrich Nexstar’s portfolio as they feature the top-rated local newscasts in several of the country’s top markets, including Los Angeles (KABC), New York (WABC) and Philadelphia (WPVI). The channels reach 23% of the US
ABC broadcasts major sports under deals with Disney’s ESPN that include two Super Bowls in the next 10 years and the NBA Finals through 2025.
Any deal to sell ABC to Nexstar would likely face significant regulatory hurdles, as Nexstar has already reached the Federal Communications Commission’s cap on station coverage in the U.S. following its deal to buy Tribune stations four years ago.
Tom Carter, former president of Nexstar and now advisor to the chairman and board of directors, told investors at a Bank of America securities At the conference on Wednesday, he indicated that the company was interested in acquiring assets, noting that in this way the company had grown into a giant. Carter then named Disney as a possible seller.
But Carter added: “We don’t know what Disney wants to do.”
Carter said a deal for Disney’s networks would only require some divestitures to keep the company in compliance with federal TV ownership rules. Station owners are limited to stations that cover 39% of the U.S., and Nexstar already has a presence there.
Many of Nexstar’s channels are affiliates of NBC, Fox and CBS. NBC owner Comcast Corp. and CBS parent Paramount would likely object to their stations being owned by a network rival.
Additionally, several pay-TV operators, including DirecTV and Comcast, have filed FCC complaints against Nexstar for anti-competitive business practices and violations of federal media ownership rules.
DirecTV filed a federal lawsuit in New York earlier this year alleging that Nexstar conspired with two other companies to illegally increase retransmission royalties for pay-TV operators.