Tom Carter, a longtime former Nexstar exec who’s now a senior advisor to the CEO and board of administrators, says the corporate may purchase Disney’s native ABC TV stations with “little friction” in the event that they grow to be accessible.
Disney CEO Bob Iger spurred speak of a possible sale of the eight stations over the summer time when he mentioned a few of the firm’s linear TV holdings “may not be core” to the corporate sooner or later. Personal fairness corporations are among the many potential consumers placing out feelers, given their sizable investments in native TV in recent times. Nexstar is a quintessential byproduct of M&A, with Carter estimating the corporate pulled off about 40 acquisitions in his first 10 years on the firm. Multi-billion-dollar offers for Media Common and Tribune Media vaulted what had been a boutique Texas agency 20 years in the past to the No. 1 spot amongst all U.S. station house owners, and final fall it confirmed its urge for food once more by taking a majority stake in The CW.
“We think there could be some opportunities depending on how things fall out,” Carter mentioned of the ABC state of affairs at an investor convention hosted by BofA Securities. The previous president and COO, who segued to his advisory function final month, appeared alongside Nexstar CFO Lee Ann Gliha.
“Disney had talked about it this way: ‘Let’s morph into a GrowthCo and a SustainableCo,’” Carter mentioned of the media firm’s strategic shift throughout Iger’s second stint as CEO. “The only issue is, the SustainCo is funding the GrowthCo, and if you sell one, you’ve lost access to that cash flow. Granted, you’re going to have proceeds, but is that really what you want to do?”
If the reply to that query finally ends up being “yes,” then Nexstar could be a robust candidate to take over the stations, Carter mentioned. Given the “massive” money move advantages ensuing from previous offers, “I think you’ll see us take a look at it,” he mentioned. One potential complication could be programming overlaps. “You’re seeing ESPN simulcast a large portion of their sports telecasts on ABC. If you were to buy the ABC complex, how would that work going forward? There are a lot of questions that need to be answered.”
Requested in regards to the FCC’s 39% cap on station possession by one firm, Carter acknowledged that the corporate is already at that restrict. “But that would not preclude us from buying stations,” he mentioned. “ABC’s portfolio of stations is modest. It’s only eight, largely in the top 10 markets. We’re in eight of the top 10 markets already with a CW station. We could buy a second station in that market and not increase our household footprint. There may be a few stations that would require divestiture of either a Nexstar station or an ABC station, but we could onboard those with relatively little friction.”
After a second or two handed and the dialog was about to maneuver on, Carter added, “I don’t know if there’s a deal to be done there. I think they’ve got to be a bit clearer in their own thinking about how that goes. We can take direction but we’re not necessarily out there leaning into this stuff without a clear path.”
Carter additionally shared an replace on a protracted carriage dispute with DirecTV that has seen Nexstar stations stay darkish for about 10 million clients of the satellite tv for pc TV operator. The deadlock started in July, and over the primary month, “there wasn’t a lot of movement going on,” Carter mentioned. In latest weeks, nonetheless, “we’ve been in pretty constant contact” with DirecTV, he mentioned, with out going into specifics. “Progress has been made. We’re not going to do a bad deal. But our expectation is that we’re going to reach an agreement at some point, hopefully sooner rather than later, because everyone agrees that it’s not in anyone’s best interest to alienate the consumer.”
On the carriage entrance, Carter and Gliha had been requested for his or her takeaways from Constitution’s carefully watched renewal with Disney. “The outcome is good for us,” Gliha mentioned, provided that it preserves foundational components of the pay-TV bundle. Carter agreed, saying of fellow stakeholders in pay-TV, “We’re putting the band back together.” By integrating streaming companies with different channel choices, as is known as for within the Spectrum-Disney deal, “We’re recreating the bundle by bringing Disney+ back into the pay-television ecosystem and not strictly as a DTC product. So, one of the potential benefits of the Charter-Disney deal is that it could potentially lessen subscriber attrition going forward, because there’s less reason for customers to leave the bundle.”