What happens to ESPN if Disney sells ABC?
The GIST: The more ESPN intertwines itself with ABC, the more it complicates the potential billion-dollar deal on the table if Disney were to sell its flagship broadcasting channel. In the Disney family, ABC's the plant that grows on rocks.
The details: Disney has recently been in talks to sell ABC to Nexstar Media Group, as well as fielding a $10B bid from Byron Allen for ABC, Nat Geo, and FX. Disney could stand to make a $4B profit, but the sale of the network has been complicated by its increased sports broadcasting coverage.
- In addition to 15 Monday Night Football simulcasts this season, the channel hosts the NBA Finals, the NHL’s Stanley Cup Finals, and a popular NFL Draft broadcast. Additionally, ABC will be home to Super Bowl LXI and Super Bowl LXV and Disney has UFC and College Football Playoff deals for the channel in the works.
The context: Streaming and AI have challenged the traditional TV model, which is why deals are being reworked to adapt to the brave new world of television. As the media landscape inches toward Black Mirror dystopia, a traditional cable platform like ABC will increasingly lose value — just compare its $4.5B valuation to ESPN's $30B price tag.
- Even if ESPN moves toward streaming and away from its lucrative affiliate revenue model, there will always be money in broadcasting live sporting events, and ESPN can meld its sports foothold with ABC's broadcast reach. Besides, there might not be any buyers for ABC anyway — it's all just talk as of now.
Zooming out: Even if there's no takers, Disney's interest in slimming down reflects a greater trend in the media market. Companies are looking to consolidate and recalibrate, and for Disney, that means focusing on movies, streaming, and parks. Never look back darling, it distracts from the now.