Breaking: Disney Has Conversations with Partners to Launch Standalone ESPN Streamer; ABC, Disney Channel Could Be Sold

Fresh on the heels of having his contract as Disney’s CEO extended, Bob Iger spoke with CNBC on Thursday from the Allen & Company Sun Valley Conference in Sun Valley, Idaho. Now the company’s chief executive through 2026, Iger told David Faber that Disney has had conversations with potential “strategic partners” about working together to launch a standalone direct-to-consumer (DTC) streaming service for all of the live sporting events and content broadcast on the ESPN family of networks.

In addition, Iger revealed that Disney’s linear channels, including ABC, Disney Channel, and Freeform, might not be core to the company’s business moving forward. That would seem to indicate that Disney is willing to sell those networks in order to reorganize its operations amidst an increasingly chaotic television environment. Acknowledging the rise in cord-cutting, the CEO said that linear television is a “no-growth business.” Iger said that the company will need to be “expansive in our thinking” to chart a path forward while the economic forces around TV continue to make the medium’s traditional revenue streams more difficult to rely on.

While Iger conceded that linear television is “broken,” he did clarify that live sports remained different than other TV genres. Because of the pull that they have on fans, and the appointment nature of the broadcasts, live sports “stands tall” in comparison with the rest of traditional TV programming, the CEO noted. While he did not dismiss the possibility that ESPN could be among the channels sold, this point of view provides some perspective on why Disney is looking to work with outside companies in order to bring a more fully realized ESPN streaming product than the growing, but still limited, ESPN+.

Disney and ESPN executives have long discussed the potential of placing all of ESPN's programming under one streaming umbrella, but the conversations have especially ramped up over the past few months. Back in February, Iger said that the company was “just not there yet” when it came to making the move, but since then, it appears that Disney has ramped up its timetable. In early May, ESPN’s Chairman Jimmy Pitaro discussed what the streamer could look like when it eventually came to market, and then less than three weeks later, reports began circulating that Disney was working with cable and satellite providers to renegotiate carriage deals to allow for a full streaming version of ESPN.

Iger admitted that because of the challenges brought on by COVID-19, cord-cutting, and labor unrest, his second tenure as Disney’s CEO has been more difficult than he had anticipated. And while he is “pleased with how much we’ve gotten done,” the “disruption of the traditional TV business” has brought on more issues than anything else. Because of that, Disney is open to any and all creative solutions from selling off television assets (including ESPN) to entering joint partnerships to mitigate some of the risk.

While he still believes that streaming will eventually become profitable and become the reliable cornerstone of the video business, he conceded that the industry — and his company in particular — rushed to make the move more quickly than it should have.

“Our zeal to grow our content to grow our streaming offerings diluted focus and attention,” Iger said. He admitted that by accelerating output to fill a new streaming service’s library, the company did some damage to the brands that had otherwise been reliable producers for the company, including animation, Marvel, Pixar, Star Wars, and more.

Whatever decisions Disney makes with the future of its television assets, it is clear that Iger is looking for unorthodox solutions. Now that he has officially extended his second stint as CEO, he can get down to doing what made his first tenure a success, making outside-the-box deals and reimagining what the company could be — for better or for worse.

live-tv-streaming/espn-plus
video-streaming/disney-plus
video-streaming/hulu