Disney is open to doubtlessly promoting an fairness stake in ESPN and is searching for a strategic accomplice within the enterprise because it prepares to transition the sports activities community to streaming, CEO Bob Iger stated Thursday.
The linear TV enterprise has degraded over the previous yr greater than Iger anticipated, the Disney CEO informed CNBC’s David Faber Thursday in an interview at Sun Valley, Idaho. Disney introduced yesterday Iger has prolonged his contract to 2026 as CEO. He returned to run Disney final yr after stepping down as CEO in 2020.
Disney has held early conversations with potential companions that would enhance an ESPN streaming service by extending its distribution and including content material, Iger stated. He declined to call particular companions. Disney at present owns 80% of ESPN. Hearst Communications owns the opposite 20%.
Disney has held off from placing its prime ESPN content material on its ESPN+ streaming service because it continues to make billions of {dollars} in income every year by means of conventional cable TV. Still, hundreds of thousands of Americans cancel their cable subscriptions every year, and that quantity has accelerated in recent times.
“The challenges are greater than I had anticipated,” Iger stated. “The disruption of the traditional TV business is most notable. If anything, the disruption of that business has happened to a greater extent than even I was aware.”
A broader streaming providing
Iger stated he had turn out to be extra sure in his desirous about when ESPN will launch its full direct-to-consumer providing. He declined to say when that may occur.
Iger’s feedback about discovering a strategic accomplice counsel he believes ESPN might operate higher in a streaming atmosphere if paired with different corporations’ sports activities content material. CNBC reported earlier this yr that ESPN needs to be a hub for all dwell sports activities programming if it may possibly comply with partnerships with different media corporations.
ESPN turned the crown jewel of Disney’s asset portfolio within the early 2000s by charging more and more exorbitant quantities to pay-TV suppliers for the precise to hold the community. The reputation of its sports activities programming, together with “Monday Night Football,” allowed it to this.
But within the conventional cable TV enterprise mannequin, ESPN made cash per cable subscriber — whether or not an individual watched or not. In a streaming world, solely intentional sports activities followers would purchase a service. That will increase the significance of placing as a lot high quality programming on the platform as attainable — particularly if it is priced extra increased than leisure streaming companies.
In addition to discovering a strategic accomplice for ESPN, Iger stated he was open to promoting or spinning off Disney’s legacy cable networks, together with FX and NatGeo, and its broadcast group, ABC Networks. Iger stated Disney can be “expansive” in its desirous about the legacy cable and broadcast property, exterior of ESPN.
Iger additionally stated Disney plans to amass Comcast’s minority stake in Hulu as deliberate. The two corporations struck a deal in 2019 that might give Disney the choice to purchase Comcast’s minority stake at a good market worth.
CNBC reported earlier this yr that Comcast CEO Brian Roberts had floated the concept of Disney promoting it ESPN as a part of Hulu negotiations when prior Disney CEO Bob Chapek was nonetheless working the corporate. Disney declined these overtures on the time.
Other potential companions for Disney may theoretically embrace Apple, Google or Amazon, three corporations with massive stability sheets which have world streaming aspirations and already personal sports activities content material. Amazon owns the unique rights to the National Football League’s “Thursday Night Football.” Google’s YouTube TV would be the new residence for the NFL’s “Sunday Ticket” starting this season. Apple at present owns the streaming rights to “Friday Night Baseball” and all Major League Soccer video games.
Disclosure: Comcast is the mother or father firm of NBCUniversal, which incorporates CNBC.
Source: www.cnbc.com”