After months of speculation that ABC television could be sold off in whole or part to other parties, the Walt Disney Company’s CEO Bob Iger affirmed this week that the company was more interested in keeping the broadcast network for itself.
The comments were made Wednesday during a wide-ranging interview with the New York Times at its DealBook Summit, in which Iger said he was simply thinking out loud when he told CNBC months ago that ABC may not be “core” to the future of Disney’s business.
“Sometimes, when I’m looking for a reaction to my own thought process, I like to test that process in public — particularly in ways that I might be able to get a reaction from the investment community,” Iger said. “So, my thought was, at the time, I might be public with some of that thought process…and that was a means of my saying to Wall Street that our heads were not in the sand that those businesses were having.”
He asserted that his comments never went so far as to specifically say ABC was for sale, and complained media reporters had spun his words in their coverage that suggested otherwise.
“No, it is not for sale,” Iger said definitively.
Like other broadcast television businesses, Disney has faced challenges with ABC and some of its core cable networks — including sports-centric ESPN, which it operates as a joint venture with Hearst Television — as cable and satellite customers flee skyrocketing bills.
The trend of “cord-cutting” — consumers moving away from pay television toward cheaper online options — has benefitted and hurt Disney. While its broadcast and cable networks are still profitable, the loss of revenue from affiliate fees charged on a per-subscriber basis to cable and satellite companies means that part of the business has and will erode significantly over the next few years.
To that end, Disney has been focused on building out its three streaming services: The flagship movie streamer Disney Plus, general entertainment brand Hulu and over-the-top sports network ESPN Plus. The company has also laid out plans to bring its ESPN multiplex network from cable to a standalone streaming solution within the next two to three years.
To that end, Disney still needs its traditional broadcast and cable networks to keep the streaming part of its business afloat. While cord-cutting might be chipping away at affiliate fee revenue, the broadcast and cable networks are profitable, while Disney’s streaming business is not.
In May, Disney said it lost $659 million on its core streaming products, despite pulling in $5.514 billion in revenue. Disney blamed a number of factors, including outsized content spending and some subscriber churn, for its streaming problems.
Disclosure: The author of this story worked for the Disney-ABC Television Group in 2011.