Broadcasting companies spiked this week on reports Dow Jones entertainment giant Disney is in early talks to sell ABC network and some of its linear TV assets. Disney stock rose late Thursday following reports of early discussions with local TV stations operator Nexstar Media Group. Elsewhere, media mogul Byron Allen made a $10 billion bid for Disney's assets according to Friday reports. DIS stock continued climbing Friday while NXST shares pared gains from their Thursday jump.
ABC Acquisition Talks
The discussions for the sale of its ABC network and TV stations is preliminary at this stage, Bloomberg reported late Thursday. The talks reportedly haven't involved a specific valuation yet and Nexstar would only be interested at the right price, Bloomberg sources said.
Following the news, Barron's reported a Disney spokesperson said the Dow Jones company hasn't decided its plans for ABC or its traditional broadcast TV channels. "While we are open to considering a variety of strategic options for our linear business, at the time Walt Disney Company has made no decision with respect to the divestiture of ABC or any other property," the representative told Barron's.
Elsewhere, media entrepreneur Byron Allen made a $10 billion bid to buy ABC network and assets including FX and National Geographic, a spokesperson told Reuters Friday.
Disney is in the midst of a restructuring effort aimed at reducing spending by $5.5 billion. The House Of Mouse also steadily raised the prices of its streaming services and cracked down on password sharing as its direct-to-consumer offerings operate at a loss.
Former Nexstar President Tom Carter, who serves as an advisor to CEO Perry Sook and the board, said the company is interested in acquiring assets from legacy media groups that want to restructure. Carter, speaking at a Bank of America Securities conference Wednesday, said Nexstar could acquire the ABC outlets with few divestitures to stay within regulatory limits.
However, there could be some complications due to ESPN's sharing of telecasts with ABC.
Disney reached a new pricing agreement with Charter Communications on Monday, ending a weekslong blackout after Disney pulled its channels in late August.
Disney Stock
DIS stock rose 1.3% Friday and closed up 1.2% Thursday. The gain pushed Disney back above its 21-day exponential moving average and 50-day line. Disney reclaimed its 10-day line earlier this week.
Shares have tumbled from their March 2021 high of 203.02 and are trading near their lowest levels since 2014. Disney stock has slumped about 1.5% in 2023.
NXST stock retreated 3.7 Friday after jumping 5.5% Thursday. Nexstar spiked 13.5% over the past week. Still, shares have retreated 13% this year after falling from their 2023 high of 187.31 on July 31.
Among media peers, Warner Bros. advanced 1% Friday and climbed 2.8% Thursday. Paramount Global rose 2% Friday after surging 3.5% Thursday.
Broadcasting behemoth Sinclair fell 9.8% Friday following a 14.3% leap Thursday. SBGI stock soared 19.8% on the week
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