Is Disney Planning to Sell ABC?

Walt Disney CEO Robert Iger caught company shareholders off guard with a surprise announcement this Wednesday. He confirmed rumors that an ABC “spin-off” is a possibility. While Iger assured investors that Disney is “comfortable” with its current range of assets, he admitted that executives are hesitant to prolong the relationship between ABC and Disney.

The Walt Disney Co. first acquired the ABC network in 1996, and quickly reorganized the broadcasting group. But despite Disney’s efforts at micro-management, ABC’s ratings saw several significant slumps over the years.

“There are no guarantees in terms of what will remain part of our company and what will not,” Iger said when pressed for further details at a shareholders’ meeting.

The announcement comes as no surprise to analysts who have tracked ABC’s rapid decline the past few years. Hindered by its struggling news division, the TV network has failed to move in a direction indicative of financial sustainability or groundbreaking creativity.

“ABC doesn’t add a lot of value to Disney’s other divisions,” analyst Michael Nathanson said in an interview with Reuters.

However, ABC News has soldiered on, and recently cut more than 300 jobs as part of a campaign to refocus and recapture viewers. The possibility of an ABC spin-off is further diminished by the somewhat fortunate timing of the cable dispute.

If the battle over retransmission fees ends with a victory for the networks, the value of ABC is expected to increase, effectively securing the future of the Disney-ABC relationship.