In July, a comment by Disney CEO Bob Iger changed the course of broadcast networks’ futures forever.
This clearly regular corporate interview, conducted remotely by CNBC’s David Faber, made headlines when Iger casually mentioned the possibility of selling off linear networks, including ABC.
The bombshell dropped subtly during a discussion about Disney’s business strategy. Iger casually said that these networks “may not be core” to Disney’s future.
Iger’s comments did not fall on deaf ears. The implications of his words sparked months of discussions within the industry.
The speculation was further fueled by a $10 billion offer made by Byron Allen for ABC. This statement rocked the media industry and became the topic of intense debate.
In a surprising turn of events, Bob Iger, in a subsequent town hall meeting with Disney employees, revealed that his initial comments were made to stir up potential offers only.
The reaction, he mentioned, was unexpected, implying that his statement had received more attention than he had anticipated.
According to an analysis of the situation by J. Clara Chan from The Los Angeles Times, Iger’s initial statements, if followed through, could disrupt Disney’s other assets such as Hulu and ESPN.
“Maybe this is a fault of mine, I don’t know, but I often give people the benefit of my own thinking in public, meaning I run things up flag poles to see how they’re going to fly,” Iger said. “It’s just sometimes when I speak out loud or think out loud, I get a reaction right away. In most cases when I do it, I’m trying to get a reaction from the investment community, just to see.”
“When I said that, I meant it, but I did not necessarily believe everybody would run with a story that everything was being sold, which is not the case,” he continued.
Since his comments over the summer, Iger said his time spent reevaluating the company’s business has demonstrated the value of Disney’s trove of networks, particularly for its streaming services.
“The fact that I can either watch a show on ABC in prime time or see it on Hulu the next morning, or four or five or six hours later and serve maybe a completely different audience, that has real strategic value to the company. And there’s a lot of it,” he said. “So no decisions have been made. Really that should not in any way indicate anything that is negative or, or should be of concern.”
However, after a closer analysis, it became evident that parting with ABC wasn’t a feasible option. While Iger’s bold comments may not lead to ABC being sold, it did pave the way for the Disney-Charter contract.
This agreement permitted Charter to remove some of the less prominent Disney linear networks, representing a significant shift.
