The first discussions are underway
Disney could sell linear TV business
September 15, 2023, 11:47 a.m
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Entertainment group Disney is fully committed to streaming, but is not yet making the desired profits there. For a long time they have been counter-financed by linear TV channels. However, sales there are also declining. Apparently reason enough to think about selling.
After Disney has shown itself open to saying goodbye to its classic TV business, the first interested parties are coming forward, according to media reports. Among other things, there were initial discussions with the local broadcaster operator Nexstar, reported the financial service Bloomberg. Disney emphasized on Friday night that it was examining strategic options for the linear TV business, but had not yet made a decision about selling ABC and other channels.
A break from linear TV would be a drastic change for Disney. But the fact is that the cable TV business in the USA, which has long been very lucrative, is shrinking. Disney relies on streaming to reach consumers directly. But the streaming activities surrounding the Disney+ service are still in the red – which have so far been made up of, among other things, with the money from linear TV. In the last quarter, revenue from classic television fell by seven percent to $6.7 billion. Operating profit fell 23 percent to $1.9 billion. Meanwhile, streaming sales increased by nine percent to $5.5 billion – with an operating loss of $512 million.
In this situation, Disney boss Bob Iger wants to produce the program for the streaming service more cheaply and has already ordered that there should be less expensive series and films from the world of Marvel comics and the “Star Wars” universe. Meanwhile, Disney no longer expects to achieve the 2022 target of 215 to 245 million subscribers to its streaming offering in 2024, wrote Bloomberg. Last quarter, Disney+ subscribers increased from 104.9 to 105.7 million.
Bloomberg also reported that American TV entrepreneur Byron Allen had offered Disney $10 billion for ABC, local channels and cable channels FX and National Geographic. No assessment had yet been discussed in the discussions with Nexstar, it said, citing people in the know.