With Comcast in the midst of buying NBC Universal from GE, the New York Post on Monday speculated about the possibility of another TV network sale – either ABC or CBS. The underlying premise was that the nets are suddenly more attractive because of retransmission consent cash flowing in.
The premise of the Post story is that the networks are in line to split as much as $5 billion annually in retrans sharing with stations by 2016, which makes the networks more attractive after years of not having a second revenue stream like their cable competitors. But the story also claims that the value of the networks is held back by their ownership of broadcast stations, which have been hard hit by the advertising downturn of the past couple of years. The story fails to note that Comcast has emphatically stated that it does not want to sell off the O&O stations and become 100% dependent on affiliates for distribution of NBC.
Disney CEO Bob Iger has been asked repeatedly about whether he would be willing to sell off ABC – and he has diplomatically done what any good CEO would do – never say never and leave the door open to future possibilities.
Sumner Redstone, the controlling shareholder of both CBS and Viacom, has been more resistant to any talk of selling – but then, he will turn 87 next week.
RBR-TVBR observation: Only a fool would want to buy a broadcast network without its big market O&Os. Rupert Murdoch, whose News Corporation owns the NY Post along with Fox, has tried to explain that numerous times to dunderheaded Wall Street analysts who just don’t get it. As for whether ABC or CBS will be sold, we can say with considerable confidence that Bob Iger would be willing to sell ABC if someone offers Disney a premium price above its value to the parent company. To overcome Sumner Redstone’s ego, though, a bid to buy CBS would probably have to be at a really big premium to win acceptance.