Disney considering selling off its radio unit

Disney considering selling off its radio unit

Walt Disney is considering selling off its radio division in a deal which can be worth around USD 3 Billion. The report was released by Wall Street Journal which said that the company is looking at a way to both extract cash from the split and structure a tax-free spin off to Disney shareholders. The company runs as many as 71 stations along with more than 4,500 affiliate stations in collaboration with companies like ABC News Radio and ESPN Sports Radio.

Disney has not revealed what it earns from its radio division though the market analysts believe it to be in the range of around $700 million. This is around twice the growth of the radio industry in general. The report says that the deal would have to be done with a similar sized company for the Disney shareholders would like to keep 50 percent of the new company’s equity.

One of the potential partners for Disney can be Cox Radio Inc., the nation’s No. 3 broadcasting company in terms of revenue. Other options are Citadel Broadcasting Corp., the No. 5 U.S. radio group; Entercom Communications Corp. of Bala Cynwyd, Pa.; and Emmis Communications Corp. of Indianapolis. WSJ also commended Disney for doing an excellent job with their radio division in the last couple of years.

Disney has been quite successful in integrating this division with their other businesses making proper use of their brand name in the fields of news, sports and children programing. However, in spite of impressive growth the radio devision has been a letdown when compared to other branches of this media group.

It is also said that the outgoing CEO of the company was against the move to sell their radio division. But the newly appointed CEO Robert Iger is more open to such business opportunities. The company has however declined to comment on these market rumors.