Disney ‘is in talks’ to sell ABC Network and its local TV stations to broadcaster Nextstar, which owns NewsNation

Disney has held exploratory talks about selling ABC Network and regional TV stations to Nexstar Media Group, the local station operator that owns NewsNation, according to multiple reports on Thursday.

The discussions come after Disney CEO Bob Iger said in July that the company could sell some of its traditional TV assets, which have struggled for years due to the rise of streaming services.

Two sources confirmed the talks to Reuters, with one saying Nexstar’s interest is preliminary and may not lead to a deal.

Disney’s ABC consists of a national television network and eight regional channels. It also has affiliate agreements with approximately 240 local television stations that reach nearly all U.S. television households.

Nexstar has 200 owned or partner stations in 116 markets reaching more than two-thirds of the U.S. population, as well as national TV networks such as CW and NewsNation. It has a market value of $5.25 billion.

Nexstar and Disney did not immediately respond to requests for comment.

Bloomberg Newswhich first reported that the two companies were in discussions about a deal for ABC, said media mogul Byron Allen, owner of a string of TV channels, has also had talks with Disney

Disney shares rose 1 percent, while Nexstar shares rose nearly 6 percent.

Former Disney CEO Michael Eisner agreed to buy Capital Cities/ABC in 1995 for $19 billion.

In July, Iger suggested during a CNBC interview that the company’s television business, including its stations and cable channels, “may not be the core of Disney.”

His comments sparked a flurry of activity among bankers and private equity players, who began evaluating whether to “take a step,” a banker, speaking on condition of anonymity, told Reuters.

“He’s sending a signal to investors,” the banker said. ‘It makes people think.’

Disney’s ABC consists of a national television network and eight regional channels. The station’s most popular shows include American Idol

In July, Iger suggested during a CNBC interview that the company’s television business, including its stations and cable channels, “may not be the core of Disney.”

Iger fueled this suspicion during Disney’s third-quarter earnings call, when he said the company was considering strategic partnerships for its major sports brand ESPN and had received “notable interest,” although Disney planned to retain control.

Iger has said the three businesses that will drive the biggest growth over the next five years are the company’s film studios, theme parks and streaming video.

Some executives have speculated that Iger’s endgame is a sale of Disney itself.

To make it attractive to the only likely buyers big enough to stomach a Disney — Apple or Alphabet’s Google — Iger would have to pare Disney down to just the parts that retain its global intellectual property portfolio while keeping its cash-generating legacy operations such as TV.

“There’s no way a FAANG company is going to buy his company when he has all these cable channels, a broadcast network and a cable sports network,” the executive said, using an acronym for the five major US tech companies, Facebook (now Meta), Apple, Amazon , Netflix and Google.

“It’s not the business they’re in, and it’s unlikely the government will ever allow it.”