Disney Exec Confirms Company is No Longer Looking to Spin Off ESPN
Disney Exec Confirms Company is No Longer Looking to Spin Off ESPN
To spin off, or not to spin off? That is the question that Disney has been struggling with in regard to their flagship live sports linear channel ESPN. The network, which carries such ubiquitous sports programs as “SportsCenter” and “Monday Night Football” would instantly become one of the most popular entertainment properties available if it were sold to a third party, but it would be expensive as the price tags for live sports rights continue to climb at alarming rates.
Selling off ESPN is a conversation that has been ongoing at Disney for over a year. However, chatter around the topic seemed to die earlier this summer, as it was reported that Disney CEO Bob Chapek was out on the idea of selling ESPN, and was focused on growing the success of ESPN+ instead.
However, a letter from activist investor Dan Loeb reignited the conversation last month. Amongst other proposed changes — including buying out Comcast's third of Hulu ahead of schedule — Loeb urged Disney to spin off ESPN to another company. Disney has been quiet on the subject since getting Loeb’s letter, but Disney’s EVP and CFO Christine McCarthy provided some clarity earlier this week at the Bank of America Media, Communications, and Entertainment Conference.
“We like the hand we have with ESPN and the way we have integrated it into our product offerings,” McCarthy said. “As a management team, we always look at our assets and look at them, is our portfolio made up of the right group of assets? ESPN is a great business, and it is fully integrated into how we think about delivering entertainment with compelling content to consumers.”
McCarthy did not completely shut the door on the potential of future changes in regards to ESPN, however. CEO Bob Chapek said earlier this year that a standalone ESPN streaming service would be “the ultimate fan offering.” Disney is certainly thinking of ways to launch ESPN as a standalone streamer, but as of now, company execs appear to be convinced that there’s no reason not to keep it under the Disney umbrella.
“We always look at are there other alternatives where we would be better off doing something different,” McCarthy said. “And we’ve gone down that route very deliberately and rigorously with my finance team and strategy teams.”
If Disney were to have sold off ESPN, the ideal time has probably passed. With the recent financial pullback across the entertainment — and, particularly, streaming — industry, the thirst for big swings seems to have been quenched for the time being. While owning the rights to broadcast live sporting events remains vital for many linear and streaming outlets, they are also becoming astronomically expensive, likely pricing out many cost-conscious conglomerates.
However, that leaves the possibility that ESPN’s linear content could be folded into ESPN+ very much in play. With each new rights deal, Disney has included provisions for the eventuality that games and matches will be available to stream; but the question remains, when will that happen for all of ESPN’s catalog of sports rights?
ESPN Select
ESPN Select is a streaming service that replaced ESPN+ and provides access to live NHL, MLB, and MLS games, PGA Tour Golf, international sports events, ESPN original programming, and a complete archive of “30 for 30.” Find out our review of the service and how to start streaming ESPN Select.