Disney ABC Stations Might Be Purchased By Nexstar With Little Friction If They Are Bought Off, Firm Advisor Tom Carter Says; Hails Progress In Prolonged DirecTV Carriage Dispute

Disney’s ABC Stations Could Be Bought By Nexstar With “Little Friction” If They Are Sold Off, Company Advisor Tom Carter Says; Hails “Progress” In Lengthy DirecTV Carriage Dispute


Tom Carter, a longtime former Nexstar exec who’s now a senior advisor to the CEO and board of administrators, says the corporate might purchase Disney’s native ABC TV stations with “little friction” in the event that they grow to be accessible.

Disney CEO Bob Iger spurred speak of a possible sale of the eight stations over the summer season when he mentioned among the firm’s linear TV holdings “may not be core” to the corporate sooner or later. Personal fairness companies are amongst these placing out feelers, given their sizable investments in native TV in recent times. Nexstar is a poster baby for development by means of M&A, with Carter estimating that the corporate pulled off about 40 acquisitions in his first 10 years on the firm. Multi-billion-dollar offers for Media Common and Tribune Media vaulted what had been a boutique Texas agency 20 years in the past to the No. 1 spot amongst all U.S. station house owners, and final fall it confirmed its urge for food once more by taking a majority stake in The CW.

“We think there could be some opportunities depending on how things fall out,” Carter mentioned of the ABC scenario at an investor convention in New York hosted by BofA Securities. The previous president and COO, who segued to his advisory position final month, appeared alongside Nexstar CFO Lee Ann Gliha.

Requested about investigations by Paramount International and Disney of strategic choices for his or her linear TV property, Carter centered on the latter. “Disney had talked about it this way: ‘Let’s morph into a GrowthCo and a SustainableCo,’” he mentioned, referring to the media firm’s outlook throughout Iger’s second stint as CEO. “The only issue is, the SustainCo is funding the GrowthCo, and if you sell one, you’ve lost access to that cash flow. Granted, you’re going to have proceeds, but is that really what you want to do?”

If the reply to that query finally ends up being “yes,” Carter mentioned, then Nexstar could be a powerful candidate to take over the stations. Given the “massive” money circulate advantages ensuing from previous offers, “I think you’ll see us take a look at it,” the exec added, although one potential complication could be programming overlaps. “You’re seeing ESPN simulcast a large portion of their sports telecasts on ABC. If you were to buy the ABC complex, how would that work going forward? There are a lot of questions that need to be answered.”

Requested concerning the FCC’s 39% cap on station possession by one firm, Carter acknowledged that the corporate is already at that restrict. “But that would not preclude us from buying stations,” he mentioned. “ABC’s portfolio of stations is modest. It’s only eight, largely in the top 10 markets. We’re in eight of the top 10 markets already with a CW station. We could buy a second station in that market and not increase our household footprint. There may be a few stations that would require divestiture of either a Nexstar station or an ABC station, but we could onboard those with relatively little friction.”

Serving to gas Nexstar’s acquisitions spree has been an enviable steadiness sheet, which has had a substantial amount of money on the books and little debt, a uncommon combo within the media enterprise. Carter centered his feedback on the ABC stations, which is Nexstar’s core competency. Whereas it has run The CW for the previous yr, that broadcast community is a much smaller operation than ABC, and it’s not clear whether or not ABC’s mom ship could be among the many linear property Iger views as probably “non-core.” House owners of all broadcast networks have been taking ever-closer appears to be like at their operations given the stresses that have been mounting even earlier than twin strikes emerged to jeopardize the complete 2023-24 season.

After a second or two handed and the dialog was about to maneuver on, Carter added a remaining tag to his Disney observations. “I don’t know if there’s a deal to be done there,” he mentioned. “I think they’ve got to be a bit clearer in their own thinking about how that goes. We can take direction but we’re not necessarily out there leaning into this stuff without a clear path.”

Carter additionally shared an replace on a protracted carriage dispute with DirecTV that has seen Nexstar stations stay darkish for about 10 million clients of the satellite tv for pc TV operator. The deadlock started in July, and over the primary month, “there wasn’t a lot of movement going on,” Carter mentioned. In latest weeks, nevertheless, “we’ve been in pretty constant contact” with DirecTV, he mentioned, with out going into specifics. “Progress has been made. We’re not going to do a bad deal. But our expectation is that we’re going to reach an agreement at some point, hopefully sooner rather than later, because everyone agrees that it’s not in anyone’s best interest to alienate the consumer.”

On the carriage entrance, Carter and Gliha have been requested for his or her takeaways from Constitution’s intently watched renewal with Disney. “The outcome is good for us,” Gliha mentioned, on condition that it preserves foundational components of the pay-TV bundle. Carter agreed, saying of fellow stakeholders in pay-TV, “We’re putting the band back together.” By integrating streaming companies with different channel choices, as is known as for within the Spectrum-Disney deal, “We’re recreating the bundle by bringing Disney+ back into the pay-television ecosystem and not strictly as a DTC product. So, one of the potential benefits of the Charter-Disney deal is that it could potentially lessen subscriber attrition going forward, because there’s less reason for customers to leave the bundle.”

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