Byron Allen has moved on from BET and has set his sights on ABC.
Allen, who already owns the Weather Channel as put in a $10 billion dollar bid to The Walt Disney Company for ABC and more of its networks.
The deal covers the ABC broadcast network, FX, and Nat Geo, which generated $1.25 billion in EBITDA over the past year, translating to an 8x trailing cash flow multiple. However, this multiple may be influenced by declining viewership this year, leading to lower ad revenues for ABC and the cable networks.
The cable network industry has been facing challenges, worsened by recent strikes by writers and actors guilds, resulting in a lack of fresh content on cable and broadcast networks.
Nonetheless, competitive bidding may still occur, with reports suggesting Nexstar’s interest in the ABC Network.
Approximately 55% of the cash flow comes from the ABC network, with the remaining 45% from the cable networks. Few transactions have occurred involving cable networks in recent years due to cord-cutting and cord-shaving, significantly reducing cash flow for most cable networks. Byron Allen’s investment in this sector may encourage more cable networks to enter the market.
Byron Allen also owns the Weather Channel and various TV stations and over-the-air networks, including Pets.TV, Comedy.TV, Recipe.TV, Cars.TV, ES.TV, MyDestination.TV, Justice Central.TV, The Grio Television Network, This TV, and Pattrn.
It’s worth noting that Byron Allen had a recent public dispute with Nielsen Media Research, the company on which ad dollars are based. In 2022, Allen sued Nielsen after his ratings bill skyrocketed from $42,000 a month to $475,000 a month. This situation highlights concerns about Nielsen’s monopoly-like power and leverage, leading Allen to file a $2.2 billion fraud lawsuit against Nielsen.