Amid rumors of Disney’s potential sale of ABC, its New York-based commercial broadcast network, a little-known TV giant has emerged as the most likely buyer: Nexstar Media Group.
Nexstar, which is based in Irving, Texas, is reportedly in talks with Disney to purchase the TV network, according to Bloomberg. The deal is still under wraps, but Nextsar—which has merged and acquired its way to top spot among all US local TV companies—certainly has an appetite for purchases.
Neither Disney or Nexstar have commented specifically on any negotiations. But last week, Tom Carter, an adviser to Nexstar’s board, told investors that the company is interested in buying more legacy media assets, and that it could take over the ABC network with “relatively little friction.”
Founded in 1996, Nexstar’s network reaches more than 68% of all US TV households. On its website, Nexstar says that it “owns, operates, programs or provides sales and other services to 200 broadcast stations...in 116 markets.” It operates The CW, a major TV network in which Nextsar took a majority stake last year. It also runs TV channels owned by affiliated companies, such as Mission Broadcasting and Vaughan Media. It also boasts partial or full ownership of NewsNation, Food Network, and the Cooking Channel, as well as the political platform The Hill.
Nexstar’s full-year net revenue hit $5.21 billion in 2022, a 12.1% rise from 2021, and it has been flexing its financial muscle in recent years to go on a shopping spree. Apart from the 75% stake it bought in The CW, other notable purchases include the $35 million acquisition of the San Diego-based KUSI-TV station from McKinnon Broadcasting Company. In 2018, Nexstar added Tribune Media to its portfolio for $4.1 billion, a year after acquiring Media General for $4.6 billion, prompting a change of name from Nexstar Broadcasting Group to Nexstar Media Group. Acquiring Media General made Nexstar the owner of 71 additional TV stations, while the Tribune Media acquisition added another 42 stations.
Through its digital division, Nexstar reaches more than 45% of the US internet audience, providing both local and national news. In March last year, the company reported serving 133 million visitors on its digital platforms, “generating 820 million page views.”
Bob Iger, Disney’s CEO, ignited speculation about the future of ABC and other stations when he said that their linear TV business “may not be core” to the company’s future. A sale would streamline Disney, even as its balance sheets grow choppier.
The company’s shares recently traded at a nine-year low, and it has lost more than $11 billion in streaming revenue since the introduction of its Disney+ service in 2019. In the most recent quarter alone, Disney lost $512 million as more than 11 million subscribers quit the platform, largely thanks to subscription price increases and password crackdowns. The theme park business has been the brightest spot in Disney’s portfolio; in its third quarter earnings, announced in early August, the Parks, Experiences and Products division reported revenue of $8.3 billion, up 13% year on year.
In addition to Nexstar, other potential suitors for ABC include the Sinclair Broadcast Group and the private equity firm Apollo Global Management. The comedian and media tycoon Byron Allen has also shown interest, reportedly making a $10 billion offer to acquire ABC—even though the network and its stations are expected to be valued at around $4 billion.