Fade to Black

What took place this past week in the media world, involved a helluva lot more than just some technical difficulties.

Disney CEO Bob Iger said he’s ready to dump out of the linear TV business. 

In an interview with CNBC’s David Faber, Iger said the ABC Television Network, which includes GMA, ABC World News Tonight, Dancing With the Stars and all of the top-rated Disney owned television stations in the largest markets in the nation, “may not be core” to its corporate strategy.

He said Disney needs to be “expansive in its thinking” about offloading the TV network.  That’s CEO speak for “the old TV business stinks and we’d like to dump it, pronto.”

Iger dropped the bombshell at the Allen & Company Sun Valley conference, where media moguls gather every year to talk dealmaking.  He certainly knew what he was saying and where he was saying it.  And he put his compadres that own broadcast networks on notice that the fire sale is about to begin.

Once upon a time, owning a TV network and its television stations, was as good as owning a printing press that was churning out stacks of bucks faster than a speeding bullet.  The phones would ring off the hook with advertisers clamoring to pay top dollar to reach prime time audiences that had no choice but to watch broadcast TV.

Profits were enormous.  Competition was fierce. The parties were legendary.

But let me ask you.  When was the last time you turned on a TV station to watch a show before you clicked on Netflix, Amazon Prime or Apple TV?  When was the last time you watched the 6 o’clock local news, or the national news at 6:30?  How about like, never.

The money the legacy broadcast networks and their TV stations generate, has been in decline for years.  It was kinda okay when the media companies didn’t have to spend boatloads of cash on creating streaming content.  They could get by before consumers started telling their cable companies to take a hike and before Netflix and chill became part of the lexicon.  I bet you never said hey, let’s ABC and chill.

In the new world media order, legacy TV networks and their stations have become albatrosses around the necks of their corporate parents.  

The linear TV business that we grew up on, may not be dead but it is definitely being wheeled around in a nursing home where dinner is served promptly at 5pm. 

OK, so Iger says he wants to dump ABC.  But what if you don’t work for ABC?  None of the other guys have said anything about selling off their networks.  Maybe you’re safe.  Maybe not.

Bob Iger has let the genie out of the bottle.   

Here’s a news flash for all you dedicated TV employees.  Publicly traded companies and their big investors, don’t like to be left at the alter.  If  Mickey Mouse can’t afford to carry its TV divisions on its back, how can the other, smaller media companies shlep theirs along? 

What Iger said aloud the other guys are thinking, too.  But, and here’s the big but…who’s going to buy these brachiosauruses of broadcasting?

Rich Greenfield, a media and technology analyst told Yahoo Finance that “The linear TV business is just under a lot of pressure, and investors are already asking me, ‘Well who are they selling to?’ ‘Who wants to buy a linear TV business?’”

Maybe Apple?  Maybe Amazon?  Companies that need content but don’t rely on it to make money.  But there’s only one Apple and only one Amazon, so here’s where my former colleagues need to worry.  

Don’t count on Apple or Amazon being your saving grace.  When the CEO’s start playing Let’s Make a Deal with their broadcast assets, your network could end up behind door number three and zonked by a private equity firm.  You know what they’ll do.  They’ll strip your old house so far down to the studs, it will end up being a house of cards.

Those of you who still work in the legacy TV business know what I’m saying is true, even though you may be in denial.  You’ve seen it coming for years.  Cutbacks after cutbacks.  New initiatives after new initiatives.  New journeys after new journeys.  

You thought you’d live longer and prosper.  You’ve given it all you’ve got.   But your shields are depleted and you’re about to be beamed onto an inhospitable planet run by alien lifeforms.  

In the words of a famous TV star, “Ruh-roh.”  My friends, the tribe has spoken and it’s time to go.