Sept 23 (Reuters) - Walt Disney ( DIS ) should shut down
the ABC network rather than sell it and transfer the channel's
content to its streaming platforms to lower regulatory risks and
unlock higher valuation, brokerage Needham wrote in a client
note on Tuesday.
The recent "FCC intervention has made owning broadcasting
licenses too expensive and too volatile for DIS shareholders, in
our view," the brokerage said.
Disney's ( DIS ) decision to take Kimmel's show off the air last
week added fuel to the debate of free speech in America amid
conservative uproar around the late-night host's comments
surrounding the assassination of right-wing activist Charlie
Kirk.
The suspension came after Federal Communications Commission
Chair Brendan Carr threatened to investigate Kimmel's commentary
about Kirk, sparking questions around regulatory authority as
federal law prohibits the FCC from revoking a broadcaster's
license for negative coverage or other speech the government
dislikes.
Disney ( DIS ) on Monday announced the return of the comedian to
late-night television.
The media firm did not immediately respond to a request for
comment on the Needham note.
ABC is very important for Disney's ( DIS ) audience reach and sports
rights negotiations, even as streaming grows. However, the
business has seen declining performance in recent years,
mirroring industry-wide trends as audiences increasingly shift
to streaming.
(Reporting by Harshita Mary Varghese in Bengaluru; Editing by
Anil D'Silva)