African-American media mogul Byron Allen has extended a groundbreaking offer of $10 billion to acquire Disney’s flagship broadcast network, ABC TV, and the FX and National Geographic cable channels.
This bold offer from Allen comes at a time when Disney is actively reevaluating its portfolio, aiming to divest what it considers non-core assets to sharpen its focus on the burgeoning streaming sector.
Allen‘s recent bid represents a significant development in the rapidly evolving media landscape. After initially pursuing a majority stake in BET Media Group from Paramount Global, he decided to expand his media empire, Entertainment Studios, which boasts interests in television production, broadcasting, film production, and digital media.
Disney has been engaged in exploratory discussions concerning its ABC network and eight local TV stations as it evaluates strategic alternatives for its traditional television networks. The American multinational mass media and entertainment conglomerate has stated that no decisions regarding a sale have been finalized.
Allen’s $10-billion bid for Disney’s flagship broadcast network, ABC TV, and the FX and National Geographic cable channels is part of his strategy to fortify his burgeoning media empire. In recent years, he has invested more than $1.3 billion in acquiring assets such as the Weather Channel and a series of local stations spanning from Honolulu to Tucson.
Nevertheless, the debt burden of Allen Media LLC looms over the potential acquisition of Disney’s assets. Allen’s $10-billion offer is presently in its preliminary stages. It remains subject to adjustment based on the assumption that these properties generated $1.25 billion in earnings before interest, taxes, depreciation, and amortization (EBITDA) over the past year.
Individuals familiar with the matter have revealed that should EBITDA figures differ significantly from the assumed value, Allen must modify his proposed purchase price. The offer currently rests on a multiple of eight times EBITDA. To finance the acquisition, Allen is prepared to collaborate with banks and private equity firms.
To prevent friction with other networks like CBS and NBC, Allen may also consider selling the local TV stations he owns that are not affiliated with ABC. This underscores this major bid’s complexity and far-reaching consequences in the media industry.