The Walt Disney Co. is considering the sale of its 71-station radio group through a tax-free spinoff to shareholders.
ABC Radio’s portfolio includes three Los Angeles stations: talk station KABC-AM (790), sports station KSPN-AM (710) and classic rock broadcaster KLOS-FM (95.5).
The Wall Street Journal reported Tuesday that Disney is weighing a plan to load debt on to ABC Radio as a way of extracting cash and then spinning off the unit to merge it with another radio company. Shareholders would retain at least half of the combined company’s equity, the newspaper reported.
Disney and ABC Radio refused to comment on the report beyond a short statement. “ABC Radio is a wonderful asset,” said spokeswoman Julie Hoover. “It’s an extremely well-managed group that’s a consistent contributor to the Walt Disney Co.”
Disney’s radio portfolio is valued at $3 billion and includes clusters in leading markets such as New York, Los Angeles and Chicago. The company also owns a programming network that reaches 4,500 affiliate stations.
Because of restrictions related to the tax free structure of the deal, the suitors for the radio division need to be mid-sized broadcasters. Cited as possible partners in the spinoff are Atlanta-based Cox Radio Inc., Las Vegas-based Citadel Broadcasting Corp. and Indianapolis-based Emmis Communications Corp.