By Harshita Mary Varghese and Zaheer Kachwala
(Reuters) -Walt Disney 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 Disney shareholders, in our view,” the brokerage said.
Disney’s 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 also faced consumer backlash over Kimmel’s suspension, with some subscribers responding by canceling their Disney+ streaming service.
“While the current brouhaha over ‘Live with Jimmy Kimmel’ might force (CEO Bob) Iger to reconsider his plans, I don’t envision a scenario where a sale, spinoff, or shutdown of ABC TV happens any time soon,” said Paul Verna, vice president of content at Emarketer, adding that live sports TV programming still drives significant advertising and subscription revenue for the company.
ABC is very important for Disney’s 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.
Disney 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 averaged only 2.4 million viewers in prime time, across both its broadcast and cable channels, during the summer of 2025, according to the note, citing Nielsen data.
Late-night shows and cable news hosts have frequently jested about President Donald Trump and his cabinet, escalating a crackdown on his perceived media critics through litigation and regulatory warnings.
In July, Paramount announced the cancellation of Stephen Colbert’s late-night show, saying the decision was unrelated to legal matters. Colbert called Paramount’s $16 million settlement with Trump “a big fat bribe” two days before he was told his show was canceled.
In December, ABC paid $15 million to settle Trump’s defamation lawsuit over anchor George Stephanopoulos’ remarks on the E. Jean Carroll case.
(Reporting by Harshita Mary Varghese and Zaheer Kachwala in Bengaluru; Editing by Anil D’Silva)
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