Media Companies Are Ready to Sell. Does Anyone Want to Buy?

[michael hagerty]

The only problem for Nexstar’s bid, and it’s a big one, is pure math. Nexstar’s at the theoretical 39% ownership cap and at 68% overall reach.

h/t from @Sammi Brie for this chart and you can see why this is a problem:
View attachment 5958

I mean, Nexstar could be brazen enough to sell WABC to Mission Broadcasting as a shell duopoly with WPIX. Doesn’t mean it wouldn’t die on the vine like Apollo/Standard General’s failed purchase of Tegna or Mission’s aborted purchase of WADL (as Nexstar intended to fully operate that station).

Byron Allen’s bid, however, is a clean purchase, and is perfect goodwill PR for Disney and Bob Iger, selling the network and O&O chain to a successful Black entrepreneur in an industry that has never been encouraging or kind to them at all.

For a lot of reasons, I'd hate to see Nexstar with the ABC stations. But given that they're specifically interested in those stations, I'd guess that they'd prefer to own WABC than WPIX, KABC than KTLA, WLS than WGN, WPVI than WPHL, KTRK than KIAH, and KGO than KRON.

Fresno---they already own two network affiliates, so that'd be a spinoff of one, and Raleigh-Durham, who knows?

But I think the deal is fatally flawed because they only want the TV stations. Unless, as Kelly said above, it's advantageous to sell the network and the stations group separately.

 

[Kelly A]

For a lot of reasons, I'd hate to see Nexstar with the ABC stations. But given that they're specifically interested in those stations, I'd guess that they'd prefer to own WABC than WPIX, KABC than KTLA, WLS than WGN, WPVI than WPHL, KTRK than KIAH, and KGO than KRON.

Exactly. Nexstar is bringing water balloons to a knife fight. Trying to spin and swap to stay under the ownership caps would be a nightmare that I'm sure the Commission would like to avoid. If Byron is serious and has access to that kind of capital, Bob Iger should have the lawyers draw up the paperwork.

Fresno---they already own two network affiliates, so that'd be a spinoff of one, and Raleigh-Durham, who knows?

That, and it is Fresno. That market is like my grandfather describes: A bad penny.

 

[Loverofradio]

The only problem for Nexstar’s bid, and it’s a big one, is pure math. Nexstar’s at the theoretical 39% ownership cap and at 68% overall reach.

h/t from @Sammi Brie for this chart and you can see why this is a problem:
View attachment 5958

I mean, Nexstar could be brazen enough to sell WABC to Mission Broadcasting as a shell duopoly with WPIX. Doesn’t mean it wouldn’t die on the vine like Apollo/Standard General’s failed purchase of Tegna or Mission’s aborted purchase of WADL (as Nexstar intended to fully operate that station).

Byron Allen’s bid, however, is a clean purchase, and is perfect goodwill PR for Disney and Bob Iger, selling the network and O&O chain to a successful Black entrepreneur in an industry that has never been encouraging or kind to them at all.

This thread has had valuation estimates of ABC and its owned stations group of between $4 billion and $6 billion, so I'm not exactly sure where you're getting "as worthless as we think it is".



That's like asking why you continue to put gas in your car if you're planning on trading it in within the next year.

You do what you need to do to maximize revenue and (hopefully) profit for as long as you own an asset.



Not if they no longer own a network.

Want to make ABC more valuable? Allow localized Streaming your abc affiliate on streaming platform you already own. It’s amazing how CBS (paramount) nbc (peacock) have it figured out. They will come up with a way to keep abc/espn under the Disney umbrella. They’re cash cows for the company. They need to shed themselves of FX, Freeform, Nat Geo

 

[Loverofradio]

Sorry Nathan I’m not sure why it quoted your post. I may have hit something on accident

 

[Loverofradio]

What Disney needs to do is let nexstar have a piece of the hulu pie, so they can have a place to stream cw content the next day

 

[michael hagerty]

Want to make ABC more valuable? Allow localized Streaming your abc affiliate on streaming platform you already own. It’s amazing how CBS (paramount) nbc (peacock) have it figured out.

You've just cited the two streaming services least likely to survive as examples for Disney. What you suggest has not made CBS nor NBC more valuable, and it wouldn't do anything for ABC's value, either.

They will come up with a way to keep abc/espn under the Disney umbrella. They’re cash cows for the company.

ESPN, yes, with partnerships. The longer they wait to offload ABC, the less it will be worth. You're talking billions of dollars in stockholder value that Iger has a fiduciary responsibility for.

They need to shed themselves of FX, Freeform, Nat Geo

All part of the offer Byron Allen has made for ABC and its properties.

 

[michael hagerty]

What Disney needs to do is let nexstar have a piece of the hulu pie, so they can have a place to stream cw content the next day

No, what Disney needs to do is what it does with CBS, NBC and FOX. Charge them for next-day streaming of their content without giving up share of ownership.

 

[TheBigA]

All part of the offer Byron Allen has made for ABC and its properties.

Other than The Weather Channel and TheGrioTV, what else has he actually bought? His entire company is worth less than the offer he's making for ABC. Owning a TV network takes deep pockets, which Byron Allen has proven he doesn't have.

 

[Kelly A]

Other than The Weather Channel and TheGrioTV, what else has he actually bought? His entire company is worth less than the offer he's making for ABC. Owning a TV network takes deep pockets, which Byron Allen has proven he doesn't have.

If he can round up the investors, I say go for it. He'll learn the hard way that you can't be competitive running a major news and entertainment network on the cheap. Hopefully, Byron would have some operating capital post-purchase, and not try to do a Toys R Us with ABC.

 

[TheBigA]

He'll learn the hard way that you can't be competitive running a major news and entertainment network on the cheap. Hopefully, Byron would have some operating capital post-purchase, and not try to do a Toys R Us with ABC.

It'll be interesting to see how protective Disney is about the ABC brand. They gave Citadel a short leash on the ABC brand, and quickly re-launched the ABC Radio Network once the contract allowed. I would think they'd be even more protective of TV stations, especially if they intend to remain in the content syndication business.

 

[michael hagerty]

If he can round up the investors, I say go for it. He'll learn the hard way that you can't be competitive running a major news and entertainment network on the cheap. Hopefully, Byron would have some operating capital post-purchase, and not try to do a Toys R Us with ABC.

Worth remembering that Capital Cities was worth one-fourth of ABC in terms of book value, and bought it. It's all about outside money.

 

[TheBigA]

Worth remembering that Capital Cities was worth one-fourth of ABC in terms of book value, and bought it. It's all about outside money.

That was a different time. You could make money in broadcasting then. Today, the size of your pockets matters.

Even then, there was a lot of David & Goliath talk, as there was when Ted Turner talked about buying CBS. In some ways, Byron reminds me of Ted.

 

[Kelly A]

That was a different time. You could make money in broadcasting then. Today, the size of your pockets matters.

Exactly. The big difference is the lending landscape toward media, especially traditional media, has become so slim that even private equity and hedge funds don't want to get involved in media deals, let alone traditional TV or radio. I imagine Byron's only financing options amount to other rich friends friends and family. Putting his existing assets up for collateral wouldn't be enough for banks.

 

[TheBigA]

Putting his existing assets up for collateral wouldn't be enough for banks.

As David Field is learning. As well as his creditors. They don't want his assets. They want their money back.

 

[Kelly A]

As David Field is learning. As well as his creditors. They don't want his assets. They want their money back.

With interest.

 

[davideduardo]

Exactly. The big difference is the lending landscape toward media, especially traditional media, has become so slim that even private equity and hedge funds don't want to get involved in media deals, let alone traditional TV or radio. I imagine Byron's only financing options amount to other rich friends friends and family. Putting his existing assets up for collateral wouldn't be enough for banks.

Byron has skillfully and rather successfully played the race card in smaller situations. I don't know if that play is scalable to a deal worth over $5 billion in a field that lenders have become very skeptical of.

 

[Rusty Muck]

Worth remembering that Capital Cities was worth one-fourth of ABC in terms of book value, and bought it. It's all about outside money.

CapCities was lead by WPVI, which was second only to WTBS in terms of revenue and influence.

 

[Rusty Muck]

It'll be interesting to see how protective Disney is about the ABC brand. They gave Citadel a short leash on the ABC brand, and quickly re-launched the ABC Radio Network once the contract allowed. I would think they'd be even more protective of TV stations, especially if they intend to remain in the content syndication business.

What value is the ABC name to Disney if there’s no platform they’d own that’d use it? Disney+ and Hulu aren’t renaming themselves “ABC”.

ABC News Radio never left the scope of ABC News after the sale to Citadel; that’s why Disney was extremely protective of the brand on the radio side.

 

[TheBigA]

What value is the ABC name to Disney if there’s no platform they’d own that’d use it? Disney+ and Hulu aren’t renaming themselves “ABC”.

It depends on what they sell: The O&Os or the whole thing. Even selling just the stations comes with issues, as I pointed out.

 

[Kelly A]

What value is the ABC name to Disney if there’s no platform they’d own that’d use it? Disney+ and Hulu aren’t renaming themselves “ABC”.

Disney owns a stake in DraftKings too. There has been no interest in merging a Disney property name other than discussions-only around a potential partnership with ESPN.

ABC News Radio never left the scope of ABC News after the sale to Citadel; that’s why Disney was extremely protective of the brand on the radio side.

Now ABC Audio, is a shadow of the former ABC Radio Networks.