Hearst Bought Disney's A&E Stake to Avoid Low-Price Sale, CEO Swartz Says

Hearst Corp. acquired Disney's 50% stake in A&E Global Media because a buyout was preferable to selling the asset to a third party at "what would have been a really low price," President and CEO Steven Swartz said Tuesday at Axios' Media Trends Live event in New York. The 139-year-old media company paid $1.2 billion in cash in August for Disney's half of the venture, which the two firms had co-owned evenly since 2012. Hearst co-founded A&E in 1984 with ABC and Rockefeller Group's Entertainment Channel; Disney gained its stake through the 1996 Capital Cities/ABC acquisition, and NBCU exited in 2012. Swartz said Disney's focus on Disney+ made A&E a poor strategic fit, and the partners agreed one side should buy out the other so A&E could "experiment more" and "move a little faster." Hearst, which posted record revenue and profit last year, is working with A&E President Paul Buccieri on new growth platforms, including live events and podcasting, but has no "grand plan" yet. Swartz said Hearst will not sell its 18% ESPN stake and has no "ongoing" effort to consolidate magazine brands.