Byron Allen Offers To Acquire Disney’s TV Assets For $10 Billion

Byron Allen, the accomplished media mogul and comedian, has made a substantial bid of $10 billion to acquire a cluster of prized assets from the Walt Disney Co. (NYSE: DIS), including the coveted ABC television network, as well as the prominent cable channels FX and National Geographic.

This proposal, as per a source with knowledge on the matter as reported by Bloomberg, is in its preliminary stages and retains the potential for alterations. To facilitate this ambitious venture, Allen intends to collaborate with financial institutions and private equity firms for necessary funding.

The media tycoon’s Allen Media Group has dedicated more than $1 billion in the past three years to procure 27 affiliates affiliated with NBC, ABC, CBS, and Fox, some of which may be divested in the event the deal with Disney proceeds. Additionally, he successfully acquired the Black News Channel for $11 million. His recent attempt to secure a majority stake in Paramount’s BET channel hit a roadblock when the company ultimately decided to withdraw its plans for the sale.

Disney, while yet to publicly acknowledge Allen’s offer, had earlier this week stated its willingness to explore various strategic avenues for its linear business operations, amidst swirling rumors of negotiations with Nexstar Media Group regarding the sale of the aforementioned assets. Discussions about the potential sale have been circulating since the summer, following CEO Bob Iger’s announcement of the company’s commitment to maintaining an open-minded and objective approach toward the future of Disney’s linear TV assets. These holdings encompass the broadcast network ABC, as well as FX, Disney Channel, Nat Geo, Freeform, and various others.

The reason behind Allen potentially divesting himself of the non-ABC affiliated local TV stations he currently possesses is to prevent any complications or tensions with competing networks like CBS and NBC.

On Thursday, however, Disney issued a response to reports suggesting that the company is engaged in preliminary discussions regarding the potential sale of its ABC network and TV stations, asserting that no definitive decision has been reached at this point.

“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 statement read.

Iger recently initiated cost-cutting measures aimed at reducing operational expenditures. This includes workforce reductions and a significant overhaul of key company segments. In an interview with CNBC in July, Iger indicated that Disney was contemplating the sale of some of its linear TV assets in response to the market disruptions triggered by the COVID-19 pandemic. Disney’s portfolio in traditional TV networks features the venerable ABC network and prominent cable channels such as ESPN.

This move to acquire ABC isn’t a novel one for Allen. The former comedian turned media producer has been progressively investing over $1.3 billion in recent years to expand his media empire. His acquisitions include notable entities like the Weather Channel and an array of local stations spanning from Honolulu to Tucson. However, not every attempt to purchase media properties has yielded success, and those that did have sometimes saddled his company, Allen Media, with substantial debt.

The news follows Allen’s entertainment company forming a strategic alliance with a prominent media provider specializing in Historically Black Colleges and Universities (HBCUs). As of Tuesday, it was officially announced that Allen Media Group has entered into a 10-year media rights partnership with the Central Intercollegiate Athletic Conference (CIAA) in collaboration with HBCU GO, as per a press release.

Under this broadcasting partnership agreement, HBCU GO gains exclusive rights encompassing cable, linear, streaming, broadcast, video-on-demand (VOD), and pay-per-view coverage for all CIAA team sports, as elaborated in the press release. Furthermore, the shared mission is to eventually bring all CIAA team sports to audiences through HBCU GO and Allen Media Group platforms in the near future.

Walt Disney last traded at $84.48 on the NYSE.

Information for this story was found via Variety, The Verge, CBS, Bloomberg, Afrotech, and the sources and companies mentioned. The author has no securities or affiliations related to the organizations discussed. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

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