Dividend-paying companies are rapidly closing the earnings growth gap with technology stocks and contributing more earnings momentum to the S&P 500. After a significant increase over the past year on this key earnings metric, the trend suggests that dividend stocks may present an even stronger case to investors seeking income and safety in a volatile market.

The earnings momentum broadening out beyond the tech sector comes at a time when investors are seeking ways to limit risk amid the second military conflict in the Middle East in under a year and a shock to the oil markets that is unprecedented.

In Q1 2025, the S&P 500 Dividend Aristocrats Index posted earnings growth of negative 5.5%. By Q4 of last year, that earnings growth rate had rebounded to positive 9%. At the same time, the Nasdaq 100 Index saw earnings growth decline from over 35% in Q2 2025 to under 15% in Q4.

Simeon Hyman, global investment strategist at ProShares, said during this week’s CNBC’s “ETF Edge” podcast that the rotation that began away from the Mag 7 tech stocks well before the war merits a deeper look from investors at a time of market uncertainty.

“We think one of best ways to take advantage of it is through quality stocks, companies growing their dividends for 25 consecutive years at minimum and that have been out of favor,” he said.

While the reversal began before the outbreak of war, Hyman said high quality, lower volatility stocks may be “kind of good to have during a conflict.”

“It’s not only the price [of the stocks] turning around but the fundamentals turning around,” he said. “Go back four quarters and all the earnings growth was coming from the tech sector and Nasdaq 100. Those dividends growers year-over-year, earnings were shrinking a little bit. But now the gap has closed and may shortly go the other way. We’re almost now to parity,” he said, referring to Bloomberg data cited by ProShares in a recent blog post on the topic.

ProShares S&P 500 Dividend Aristocrats ETF (NOBL) is one of the many exchange-traded funds that offers exposure to large-cap U.S. stocks that pay healthy dividends. Its top three holdings are Chevron, Exxon Mobil and Target.

ETF experts agree that the outlook for dividend stocks has improved across the market.

“Growth characteristics of companies in the financial sector, the health care sector, the industrial sector … those are where you often find dividend growth. They continue to experience more and more growth,” Todd Rosenbluth, head of research at VettaFi, told CNBC.

A long history of dividend increases reflects consistent cash flow and disciplined management, however, it has not traditionally matched the rapid profit expansion seen in the technology sector. But strong operating performance and improving margins have helped boost profits for many dividend-payers from other sectors. And as earning rise, these companies continue to increase dividends while strengthening their balance sheets. At the same time, expectations for technology stocks remain extremely high after several years of strong gains, and as tech firms are spending huge sums on AI buildouts which is stressing their balance sheets and cash flow. Dividend-paying companies outside of tech often trade at more moderate valuations, and as their earnings growth improves, investors may increasingly view them as offering both stability and expansion.

Of course, if the U.S.-Iran war — and factors such as oil prices persistently above $100 and a Strait of Hormuz closure that is prolonged — pushes up prices across a supply-depleted economy and sends the global economy into a recession, there is no sure thing for stock investors. Dividend stocks and the ProShares NOBL ETF have been caught up in the recent stock market negative sentiment, down 5% in the past month but still up close to 8% over the past year.

Hyman said in his view this is “certainly not a time to capitulate, but maybe a time to tweak around the edges,” and focus more on quality stories. “We love our dividend growers,” he said.

He noted that after the two prior Gulf wars which were prolonged conflicts, stocks were higher in the six to 12-month periods after initial pullbacks, and up by as much as 25-30%. “The history is pretty darn clear … markets do rebound,” he said.

The history is also clear, Hyman said, on dividend stock outperformance having “some durability to it.” And right now, these stocks are pulling even more weight in the market. “In addition to the durable outperformance opportunity from the dividend growers, the other thing that is very important is that it has kept overall S&P 500 fundamentals stable” Hyman said. “They are now filling the gap,” he said, as mega cap tech earnings growth slides, “and that suggests a little bit of a soft landing,” he added.

Disclaimer

Sinclair disclosed a stake in fellow broadcast station owner E.W. Scripps on Monday, in a move to push toward a merger of the companies.

Sinclair, which acquired a roughly 8% position in Scripps per the filing, recently launched a strategic review of its own business that could result in a tie-up. Scripps, for its part, has seen its struggles mount in the competitive industry and is among the smallest of its peers.

In the filing, Sinclair said it has been engaged in “constructive” discussions regarding a deal and believes that, if it were to reach an agreement, a transaction could be completed within nine to 12 months.

Sinclair said in the filing that based on trading multiples, there would be an expected $300 million in synergies if a merger were to take place.

Scripps’ stock rose 40% on Monday while Sinclair’s stock gained almost 5%.

Sinclair, which acquired the stake for about $15.6 million, declined to comment beyond the SEC filing.

In a statement on Monday, Scripps said its board “will take all steps appropriate to protect the company and the company’s shareholders from the opportunistic actions of Sinclair or anyone else.”

“Scripps’ board of directors and management are focused on driving value for all of the company’s shareholders through the continued execution of its strategic plan,” the company said in its statement. “The board and management are aligned on doing only what is in the best interest of all of the company’s shareholders as well as its employees and the many communities and audiences it serves across the United States.”

The statement added that the board continues to evaluate “any transactions and other alternatives that would enhance the value of the company and would be in the best interest of all company shareholders.”

Broadcast TV station group owners have suffered like the rest of media companies in recent years due to the shift away from the traditional pay-TV bundles and toward streaming. These broadcast stations, for the most part, make the majority of their money from so-called retransmission fees, which are paid on a per-subscriber rate by traditional TV distributors.

Broadcast station owners like Sinclair have been eager to do mergers as they push for deregulation under the Trump administration.

In August, Nexstar Media Group, the biggest owner of these stations, agreed to acquire Tegna for $3.54 billion.

Sinclair, meanwhile, is also considering spinning off or splitting its ventures unit, which includes pay-TV network The Tennis Channel and marketing technology business Compulse, which was recently rebranded to Digital Remedy.

Sinclair and its advisors held discussions with potential merger partners earlier this year, CNBC previously reported.

A group of Disney investors is demanding access to company records, alleging that the entertainment giant’s handling of late-night host Jimmy Kimmel’s suspension reflected political pressures rather than the best interests of shareholders.

In a letter sent Wednesday to CEO Bob Iger, lawyers representing the American Federation of Teachers, AFL-CIO, a federation of labor unions, and Reporters Without Borders said they are seeking board materials, communications and policies related to the suspension of “Jimmy Kimmel Live!” 

The investor groups argue that the decision was driven by threats from federal regulators and broadcast affiliates, rather than a business calculation to benefit shareholders.

“Disney’s stock suffered significant declines in response to the abrupt suspension, which appeared to be in response to political threats,” the investors wrote in the letter, which was first reported by Semafor.

Disney shares fell 3.3% from Sept. 17, the day after Kimmel was suspended, through this past Monday. Kimmel was pulled from the air after his Sept. 15 monologue addressing the politicization of the assassination of conservative activist Charlie Kirk. The host returned to ABC on Tuesday, though affiliates representing about a quarter of U.S. households, including Nexstar and Sinclair stations, didn’t carry the program.

The investors seek board minutes, internal communications, affiliate agreements and analyses of the financial impact of the suspension.

“There is a credible basis to suspect that the Board and executives may have breached their fiduciary duties of loyalty, care, and good faith by placing improper political or affiliate considerations above the best interests of the Company and its stockholders,” the investors said in the letter.

One of the lawyers representing the investors is Roberta Kaplan, best known for winning writer E. Jean Carroll’s defamation case against Donald Trump.

“A bedrock of the United States and the key to our survival as the world’s oldest democracy is freedom of speech,” Kaplan said in a statement to CNBC. “The government cannot and should not threaten to punish someone simply because it does not like what they have to say. And while large media companies have been at the front lines, they too should not succumb to unconstitutional threats or blackmail.”

— CNBC’s Dan Mangan contributed reporting.

Nexstar Media Group said Wednesday it is continuing to evaluate whether it will bring “Jimmy Kimmel Live!” back to its ABC-affiliate stations, a day after the late night show returned to the Disney-owned network.

Nexstar’s broadcast TV stations affiliated with ABC did not air Kimmel’s return to late night on Tuesday.

“Nexstar is continuing to evaluate the status of ‘Jimmy Kimmel Live!’ on our ABC-affiliated local television stations, and the show will be preempted while we do so,” Nexstar said in a statement. “We are engaged in productive discussions with executives at The Walt Disney Company, with a focus on ensuring the program reflects and respects the diverse interests of the communities we serve.”

Nexstar, along with fellow station owner Sinclair, said it would preempt Kimmel when Disney returned the show to broadcast on Tuesday, leaving customers in many markets unable to watch the show on their local station.

A Sinclair representative on Wednesday referred CNBC to its statement on Monday, which said the company’s stations would be preempting the show and that “discussions with ABC are ongoing as we evaluate the show’s potential return.”

Two of the largest broadcast station owners, Nexstar and Sinclair together own about 70 ABC affiliate stations in the U.S.

The comedian addressed the situation during his monologue Tuesday.

“We are still on the air in most of the country, except, ironically, from Washington, D.C., where we have been preempted,” Kimmel said after a commercial break. “After almost 23 years on the air, we’re suddenly not being broadcast in 20% of the country, which is not a situation we relish.”

Last week, ABC parent Disney said it would temporarily suspend production on “Jimmy Kimmel Live!” following comments by host Kimmel that linked the alleged killer of conservative activist Charlie Kirk to President Donald Trump’s MAGA movement.

Kimmel’s suspension came shortly after an announcement from Nexstar that it would not air the program — as well as comments from Federal Communications Commission Chair Brendan Carr suggesting ABC affiliate stations could be at risk of losing broadcast licenses over Kimmel’s comments.

“It was never my intention to make light of the murder of a young man,” Kimmel said in Tuesday’s emotional monologue. “I don’t think there’s anything funny about it.”

Disney plans to bring “Jimmy Kimmel Live!” back to air on ABC’s broadcast network beginning on Tuesday, the company said in a statement.

The decision was announced nearly a week after ABC said it was suspending the late night show indefinitely. The network had pulled the show days after the host made comments linking the alleged killer of conservative activist Charlie Kirk to President Donald Trump’s MAGA movement.

“Last Wednesday, we made the decision to suspend production on the show to avoid further inflaming a tense situation at an emotional moment for our country. It is a decision we made because we felt some of the comments were ill-timed and thus insensitive,” Disney said in a statement Monday. “We have spent the last days having thoughtful conversations with Jimmy, and after those conversations, we reached the decision to return the show on Tuesday.”

The late night host will address the matter during his show set to be taped on Tuesday, according to a person familiar with the matter, who spoke on the condition of anonymity to discuss internal matters.

Following days of discussions, Disney CEO Bob Iger and Dana Walden, co-chair of Disney Entertainment, made the decision to return the show to air, the person said. The two executives informed Kimmel on Monday, the person added.

Local station owners learned of the show’s return on Monday when Disney made the public announcement, according to two people familiar with the matter.

“Jimmy Kimmel Live!” was suspended after Nexstar Media Group, which owns more than 200 broadcast TV stations across the U.S., announced its stations affiliated with ABC would preempt Kimmel’s show. Sinclair, another large broadcast TV station owner, similarly threatened to preempt the program.

Sinclair said in a release last week that it would not lift the suspension on “Jimmy Kimmel Live!” until it had formal discussions with ABC “regarding the network’s commitment to professionalism and accountability.”

As of Monday evening, a Sinclair representative said the company still planned to preempt the broadcast.

“Beginning Tuesday night, Sinclair will be preempting Jimmy Kimmel Live! across our ABC affiliate stations and replacing it with news programming,” according to a statement from Sinclair. “Discussions with ABC are ongoing as we evaluate the show’s potential return.”

Sinclair owns and operates nearly 40 ABC-affiliate stations across the U.S.,  including one in Washington, D.C., according to its website.

A Nexstar representative didn’t comment on the matter.

Kimmel said during his monologue last Monday that the “MAGA gang” was “desperately trying to characterize this kid who murdered Charlie Kirk as anything other than one of them and doing everything they can to score political points from it.”

“In between the finger-pointing there was grieving. On Friday the White House flew the flags at half-staff, which got some criticism, but on a human level you can see how hard the president is taking this,” he continued, teeing up a clip of Trump on the White House lawn in which the president fields a question on Kirk but swiftly pivots to talking about construction.

Immediately following ABC’s suspension of the show, everyone from entertainers to politicians weighed in on whether Kimmel should return to air, and whether the incident should affect station owners’ broadcast licenses.

Federal Communications Commission Chair Brendan Carr had suggested ABC’s broadcast license was at risk in light of Kimmel’s comments, telling CNBC last week, “we’re not done yet” with changes to the media landscape.

Trump suggested the federal government might revoke broadcast station licenses for the networks that are “against” him.

The FCC didn’t immediately respond to a request for comment Monday.

Networks like ABC are part of a system that requires them to obtain over-the-air spectrum licenses from the federal government in order to broadcast across local stations. Since the networks are free to air over public spectrum — meaning anyone with an antenna can watch them — they must by law operate in “the public interest.”

Both Nexstar and Sinclair are currently looking to do deals that would require regulatory approval.

Nexstar recently announced a proposed $6.2 billion deal to merge with fellow broadcast station owner Tegna, a deal that would upend longstanding regulations for the industry on how many stations a parent company can own.

And Sinclair said in August it’s exploring merger options for its broadcast business, though it has yet to reach an agreement.

A letter organized by the American Civil Liberties Union, signed by more than 400 people including Hollywood stars and artists, backed Kimmel, saying his suspension marked a “dark moment for freedom of speech in our nation.”

Meanwhile, Republican Sen. Ted Cruz of Texas criticized the FCC’s Carr for his comments related to the suspension of Kimmel.

And on Monday, New York City mayoral candidate Zohran Mamdani withdrew from an upcoming town hall on an ABC affiliate in protest of the network’s suspension of Kimmel.

Disclosure: Comcast is the parent company of NBCUniversal, which owns CNBC. Versant would become the new parent company of CNBC upon Comcast’s planned spinoff of Versant.

Disney’s decision this week to pull “Jimmy Kimmel Live!” from its broadcast network ABC is shining a light on a part of the media business over which the federal government has control. 

On Thursday, President Donald Trump suggested his administration should revoke the licenses of broadcast TV stations that he said are “against” him. Federal Communications Commission Chair Brendan Carr has made similar threats, including during a CNBC interview, also on Thursday.

It’s not the first time Trump or Carr has invoked the government’s power to pull a broadcast station license — putting an in-the-weeds part of the media business front and center for consumers, and flexing the government’s power over a major part of the industry. 

Through this public spectrum for radio and TV stations, the federal agency has the right to regulate broadcasting and requires each network “by law to operate its station in the ‘public interest, convenience and necessity.’ Generally, this means it must air programming that is responsive to the needs and problems of its local community of license,” according to the FCC website.

In August, Trump accused networks ABC and NBC of being “two of the worst and most biased networks in history” and suggested revoking their broadcast licenses.

Carr earlier this year, freshly in his post as FCC chairman, reawakened complaints directed at ABC, NBC and CBS from the conservative organization the Center for American Rights. 

And in February, during a conversation at Semafor’s “Innovating to Restore Trust in News” summit in Washington, D.C., he suggested the agency would be looking closely at licenses. 

“If you’re going to have a license to be a broadcaster, it comes with something called ‘you have to serve the public interest.’ If you don’t want to do that, that’s OK,” Carr said during the summit. “I will give you the address of the FCC … you’re free to turn your license in and you can go podcast and you go over-the-top.” 

While Nexstar and its peers have bulked up over the years through acquisitions, they’ve been subject to longstanding federal limits on the number of stations that these parent companies can own. 

Following Trump’s election in November, leaders of the station owners — as well as other media businesses — saw an opening for further consolidation and deals. 

The FCC’s Carr has also publicly said in recent months that he would support getting rid of broadcast station ownership rules and caps, paving the way for such deals, which could help salvage a business model that’s being disrupted. 

With the rise of streaming, the pay-TV ecosystem has bled consumers, and broadcast TV networks and local affiliates have also felt the effects. 

While the stations are free to air, distributors such as Charter pay the broadcasters so-called retransmission fees, on a per-subscriber basis, for the right to carry the stations. These lucrative fees heavily buoy the profits of companies such as Nexstar, which means dwindling pay-TV customers cuts into broadcast profits. 

Disclosure: Comcast is the parent company of NBCUniversal, which owns CNBC. Versant would become the new parent company of CNBC under a planned spinoff.

Sinclair, one of the largest broadcast station owners in the U.S., is launching a strategic review of its broadcast business that could result in a merger, the company said Monday.

The company and its advisors have already held deep discussions with potential merger partners, according to people close to the matter who could not speak publicly due to the sensitive nature of the talks. Still, it’s too early to determine a valuation for a potential deal, they added.

At the same time, Sinclair is also looking to spin off or split its ventures unit, which includes pay-TV network the Tennis Channel and marketing technology business Compulse. In 2023, Sinclair reorganized its company into two operating unites — local media, or the broadcast stations, and ventures, which also can act as an investment vehicle.

The company has already received board approval to explore its options. While Sinclair has had significant discussions with potential merger partners, there is no assurance a deal or spinoff will ultimately take place.

Sinclair shares were up nearly 13% in after market trading.

The media industry broadly expects deregulation under the Trump administration, particularly in the broadcast space, which could usher in a wave mergers and acquisitions.

Federal Communications Commission Chairman Brendan Carr has publicly said in recent months that he would support getting rid of broadcast station ownership rules and caps.

Sinclair has 178 TV stations, which are affiliated with major broadcasters like ABC, NBC, CBS, Fox and The CW across 78 markets.

The company reported second-quarter earnings last week in which total revenue declined 5% to $784 million and total advertising revenue dropped 6% to $322 million.

Broadcast TV station group owners have suffered in recent years as consumers continue to cut their traditional pay-TV bundles. Most stations make the bulk of their money from so-called retransmission fees, which are paid on a per-subscriber rate by traditional TV distributors, like Charter Communications and DirecTV, for the right to carry the stations.

Advertising, particularly political advertising during local elections, also drives revenue for the companies.

Sinclair has a market capitalization of roughly $875 million, with an enterprise value of more than $4.3 billion, according to FactSet. Its market value has dipped significantly as pay-TV subscribers decline.

Last year, CNBC reported that Sinclair was working with Moelis and looking to sell more than 30% of its broadcast TV footprint, or more than 60 stations. CEO Chris Ripley has said in recent earnings calls that the company was open to offloading parts of its business or exploring deals.

Other broadcast station deals may be in the works, too. Last week The Wall Street Journal reported that Nexstar Media Group, the biggest owner of broadcast TV stations, was in discussions to acquire Tegna, which has explored selling itself in recent years.

Broadcast stations owned by Byron Allen — the media mogul who has expressed public interest in buying various media assets for billions of dollars — have been consistently late in making payments to network owners, angering media allies and creating distance between Allen and his would-be deal partners, CNBC has learned.

The stations owned by Allen Media Group have been as much as 90 days past due on the payments to networks including ABC, CBS and NBC, according to people familiar with the matter. The payments total tens of millions of dollars throughout the year, and the extent of the lateness has grown worse over time, said the people, who asked not to be named because the financial transactions are private.

Allen Media Group owns broadcast stations in more than 20 markets between ABC, CBS and NBC affiliates, according to the group’s website.

ABC, CBS and NBC have all grown increasingly frustrated after what feels like a perpetual chase for the fees — even after agreeing to payment plans at Allen’s request, the people familiar said. Paying consistently late is uncommon among local broadcasters, which pay hefty sums to the larger network owners to carry the brand and some content, particularly live sports like the NFL and many postseason games across leagues, the people said.

It’s unclear why Allen Media Group has been repeatedly late with payments.

After CNBC reached Allen Media for comment this week, the group made a payment on the outstanding fees, according to people familiar with the matter. The amount of the payment couldn’t immediately be determined.

Networks often collect fees from local affiliates every one to three months, depending on the contract. The funds to pay come in large part from so-called retransmission fees that cable TV operators pay to the stations, which can create a situation where money may need to go out before it comes in. Recently, broadcast station group executives have argued this structure should change as cord cutting accelerates and networks move more of their content over to streaming platforms.

Various divisions of Allen’s company, including stations located across markets in the Midwest, Southeast, West Coast and Hawaii, have also reportedly undergone layoffs in recent months. Another round of job cuts is expected at the end of August, one of the people familiar with the matter said.

Representatives for Allen Media Group declined to address the details of this story but said in a statement: “Mr. Allen started Allen Media Group 31 years ago from his dining room table. Allen Media Group is now one of the largest and fastest growing privately-held media companies in the world and is 100 percent Black-owned.

“Like most media companies and private equity firms, we evaluate many acquisition opportunities. In the last few years, the company has successfully completed well over $1 billion in acquisitions with the continued support of the capital markets. Allen Media Group remains strong, and we continue to prudently manage our partner relationships as we have always done over our 31-year history,” the statement says.

Representatives for ABC, CBS and NBC declined to comment on the matter.

Allen’s recent M&A interest includes a $30 billion bid for Paramount Global earlier this year, a $10 billion offer for ABC and other Disney networks last year, and a reported $3.5 billion offer for Paramount’s BET Media Group, which he resubmitted in December after the process was ended.

There has also been a recent report that Allen is weighing another bid for Paramount before its “go-shop” period with buyer Skydance expires later this month.

Allen has been vocal about his ambitions to grow his media holdings, defending his track record of failed bids and telling CNBC in January that recent acquisition attempts had fallen through because some owners ultimately decided not to sell.

“We have quite a few banks that support us and stand with us and even private equity firms,” Allen told CNBC in September about the potential deal for ABC and other Disney assets. “I think other assets will start to become available, and I think we will eventually get them.”

Allen Media Group has taken to reposting public media reports on its own website of its interest in bidding on media properties — even for unconfirmed reports of interest, such as a reported $8.5 billion offer for Tegna.

Previously a comedian, Allen founded Entertainment Studios, now known as Allen Media Group, in 1993. In 2019 Allen Media Group Broadcasting was formed, and Allen has been building up his broadcast media empire since with a string of smaller deals.

In addition to The Weather Channel and broadcast TV stations, Allen Media also owns a group of small TV networks like Pets.tv and Comedy.tv, as well as Black news and entertainment network TheGrio.

And, in April 2021, Allen Media paid $380 million to Gray Television for seven stations as part of Gray’s required divestitures for its acquisition of Quincy Media.

Allen’s broadcast stations generate revenue, as most other stations do, through advertising revenue and so-called retransmission fees — payment that stations receive from pay TV operators for the right to carry their feed. Broadcast station groups, however, have also suffered as millions of people have switched from traditional TV to streaming.

A record uptick in political advertising is expected ahead of the presidential election, as some of the largest broadcast station owners like Nexstar Media Group and Sinclair have documented in recent earnings releases.

Disclosure: Comcast’s NBCUniversal is the parent company of CNBC and broadcast network NBC.

Correction: Allen Media Group paid $380 million to Gray Television for seven stations in April 2021. A previous version of this article misstated the timing of the transaction.

Usually when a person or company sells something, the primary motivation is getting back as much money as possible.

Disney‘s motivation to potentially sell ABC and its owned affiliates, linear cable networks and a minority stake in ESPN isn’t predicated on what these assets will fetch in a sale. It’s about signaling to investors the time has come to stop thinking about Disney as old media.

Disney’s market capitalization is about $156 billion. The company has about $45 billion in debt. Selling assets can help the entertainment giant lower its leverage ratio while buffering the continued losses from its streaming businesses.

Still, that’s not the prime rationale for why Disney Chief Executive Bob Iger told CNBC in July he’s contemplating selling off media assets — something he’s long resisted. Rather, a sale of ABC and linear cable networks would be a message to the investment community: The era of traditional TV is over. Disney is ready for its next chapter.

“Disney almost has a good bank and a bad bank at this point,” Wells Fargo analyst Steven Cahall said in a CNBC interview. “Streaming is its future. It’s its strongest asset, next to the parks. The linear business is something Disney has clearly signaled is going to be in decline. They’re not looking to necessarily protect it. If they can move some of that lower, negative-growth business off of the books and to a better, more logical operator, we think that’s good for the stock.”

Nexstar has held preliminary conversations with Disney to acquire ABC and its owned and operated affiliates, Bloomberg reported Thursday. Media mogul Byron Allen has made a preliminary offer to pay $10 billion for ABC and its affiliates along with cable networks FX and National Geographic, according to a person familiar with the matter.

Disney released a statement Thursday saying “while we are open to considering a variety of strategic options for our linear businesses, at this time The Walt Disney Company has made no decision with respect to the divestiture of ABC or any other property and any report to that effect is unfounded.”

About 10 years ago, analysts valued ESPN at around $50 billion.

“The sports business stands tall and remains a good value proposition,” Iger said last month during Disney’s third-quarter earnings conference call. “We believe in the power of sports and the unique ability to convene and engage audiences.”

There’s clear value, at least for the next few years, in keeping a large broadcast network for major sports leagues. NBCUniversal executives hope ownership of the NBC network will convince the NBA that it should be cut into a new rights agreement to carry NBA games. NBC is a free over-the-air service and can increase the league’s reach, they plan to argue. Even if the world is transitioning to streaming, millions of Americans still use digital antennas to watch TV.

Currently, ESPN and ABC split sports rights. Selling ABC may trigger certain change-of-control provisions that force existing deals with pay TV operators or the leagues to be rewritten, according to people familiar with typical language around such deals.

Moving on from the network also may obstruct ESPN’s ability to land future sports rights deals. Without ownership of ABC, leagues may choose to sell rights to other companies, thus further weakening ESPN.

If Iger is true to his word and Disney stays in the sports broadcasting business, the company will have to weigh the negative externalities of losing ABC with the positive gains of showing investors it’s serious about shedding declining assets.

“Obviously, there’s complexity as it relates to decoupling the linear nets from ESPN, but nothing that we feel we can’t contend with if we were to ultimately create strategic realignment,” Iger said last month.