African-American media mogul Byron Allen extended a groundbreaking $10 billion offering to acquire Disney’s flagship broadcast network, ABC TV, as well as cable channels FX and National Geographic.
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 focus more on the booming streaming sector.
Allen‘s recent candidacy represents a significant development in a rapidly changing media landscape. After initially pursuing a majority stake in BET Media Group After leaving Paramount Global, he decided to expand his media empire, Entertainment Studios, which has interests in television production, broadcasting, film production and digital media.
Disney has engaged in exploratory discussions regarding its ABC network and eight local television stations as it evaluates strategic alternatives for its traditional television networks. The American multinational media and entertainment conglomerate said no decision regarding a sale had been finalized.
Allen’s $10 billion bid for Disney’s flagship broadcast network, ABC TV, as well as cable channels FX and National Geographic, is part of his strategy to bolster his growing media empire. In recent years, it has invested more than $1.3 billion in acquiring assets such as the Weather Channel and a string of local stations stretching from Honolulu to Tucson.
Still, Allen Media LLC’s debt burden weighs on the potential acquisition of Disney’s assets. Allen’s $10 billion offer is currently 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.
People familiar with the matter revealed that if the EBITDA figures differed significantly from the assumed value, Allen would have to change its proposed purchase price. The offer is currently based on a multiple of eight times EBITDA. To finance the acquisition, Allen is willing to collaborate with banks and private equity firms.
To avoid friction with other networks like CBS and NBC, Allen might also consider selling the local television stations he owns that are not affiliated with ABC. This highlights the complexity of this major offering and its considerable consequences for the media industry.