Despite skepticism around Byron Allen’s $10 billion bid for Disney’s ABC network and local stations and cable channels FX and National Geographic, the media mogul says finding the capital is “not an issue.”
“I have access to plenty of capital… There’s trillions of dollars out there looking for a safe place to invest and get it back with a return,” the Allen Media Group chairman said during the 2023 Code Conference on Wednesday. “The real commodity is certainty of close, approval of the deal… Not too many people can get that deal approved. That’s the hard part.”
He argued that the current regulatory environment would make it difficult for tech giants to buy Disney’s linear assets and that “Washington D.C. has made it very clear they’re not interested in private equity and hedge funds buying this type of asset.” He added that other media companies wouldn’t be able to do it due to the FCC’s 39% cap on station ownership by one company.
“I’m the prettiest girl at the dance,” he added. “Let’s just be honest.”
Nexstar Media Group senior advisor Tom Carter, who previously suggested that the company would be open to buying ABC’s eight local stations, said the stations could be onboarded with “relatively little friction” if they were put up for sale.
Allen’s interest in ABC and its local stations dates back to the sale of the Washington D.C. affiliate WJLA-TV in 2014.
“By law, they can go to 39% of the country, their footprint… They stopped at 22%,” he said. “That said to me: I don’t think you’re in love with this space.”
In July, Iger suggested he would be open to a possible sale of the company’s linear assets, telling CNBC that they “may not be core” to the company.
“These legacy companies are trying to reinvent themselves. It’s like they’re trying to build a new airplane mid-air while they’re flying their old airplane in a publicly traded entity. This is a very challenging thing to accomplish,” Allen said. “Bob is excellent at what he does, he’s phenomenal, he’s the best person to do it. But whoa, they’re asking him to do something that has not occurred in 100 years. So I said, ‘OK, I’m smelling some weakness here.’”
He texted Iger immediately after the interview about a potential deal, but noted that Iger said he isn’t ready to sell.
“They have to figure it out. I think their biggest challenge is how do you decouple it, how do you pull it out of their ecosystem? Because it’s really integrated into everything Disney, and that’s the hard part,” Allen added. “But if they do get to that point where they’re willing to do it, I’m gonna chase it down like a lion chasing down a gazelle. Let’s just be clear.”
Allen Media Group owns 27 ABC-NBC-CBS-FOX network affiliate broadcast television stations in 21 U.S. markets. It also operates 12 24-hour HD television networks serving nearly 300 million subscribers, including The Weather Channel, The Weather Channel en Español, Pets.TV, Comedy.TV, Recipe.TV, Cars.TV, ES.TV, MyDestination.TV, Justice Central.TV, The Grio Television Network, This TV and Pattrn.
“I think [linear television is] a great business. It’s a phenomenal business,” he said. “I bought The Weather Channel in 2018 from a couple of private equity firms. And then they were saying, ‘Hey, take it, take it,’ and gave us a great price because they were constantly talking about the decline and the demise of linear television. And I said no, I think you’re reading it wrong. Since then, we’ve pushed up the top line revenue and we’ve pushed up the EBITDA.”
In addition to his interest in Disney’s linear assets, Allen offered $3.6 billion for Paramount Global’s BET.
“I offered them $3.1 billion Day 1 and I said I’ll give you another $100 million a year for five years in a transition services agreement. It’s a lot of money. I offered them more than what it was worth,” he said. “I felt it was important for BET to go back into Black ownership and I wanted BET not for just economic reasons, I wanted BET for social reasons. I wanted to really have a platform to lean in with Black America to say, ‘You have to vote. I need you to vote. There’s a lot of people working really hard to make sure you don’t vote.’ And that’s really why… They decided not to sell it, but that’s OK… We’ll build something bigger and better.”