Former Disney CEO Says ESPN Doesn’t Need Strategic Partners to Launch New Streamer, But is He Right?
Speaking with CNBC, ex-Disney chair Bob Chapek also said that streaming is about a customized experience. Strategic partners can help ESPN create that experience.
Bob Chapek has mostly kept his head down since being booted from the top job at Disney in late 2022. Chapek was fired in part because the Disney board did not have faith in his plans to turn around the company’s flagging streaming operations, which lost billions of dollars per quarter at the time. Bob Iger returned to his former position as CEO after Chapek’s ouster, and as Iger’s former protégé, it would hardly be surprising for Chapek to be in lockstep with his former boss’s moves. But in a new interview with CNBC which aired last week, Chapek differed from his old mentor regarding Disney’s hope to find a strategic partner for ESPN when launching its new sports streaming platform.
- Disney plans to launch a full ESPN streaming service with more content than ESPN+ by 2025.
- The company has spoken with sports leagues as well as tech/mobile firms about buying minority stakes in ESPN.
- Chapek says that streaming is all about customization, but some of the potential partners Disney has spoken with about ESPN could help increase the customization of the platform.
Chapek’s comments came as part of a new CNBC documentary about the future of ESPN. In the film, the former CEO said that he felt Disney’s quest to sell a minority stake of ESPN in order to help get its new streaming service off the ground was unnecessary.
“Strategically, I don’t really see a benefit in bringing on yet another minority partner into ESPN,” Chapek said in the documentary. “
In one sense, Chapek’s words mirror those of Iger himself, who has stated more than once that Disney is willing to bring a standalone ESPN streaming service to market without a strategic partner. Chapek also pointed to Disney’s purchase of the final 33% of Hulu that it does not technically own yet as a reason the company could be looking for strategic partners; with $8.6 billion already paid to Comcast for that stake in Hulu and the potential that Disney could owe more, it might need the cash from a strategic ESPN partner sooner rather than later.
It’s not that Chapek is trying to dissuade Disney from launching an ESPN streaming platform that offers all content available on its linear channels. Chapek called a standalone ESPN streaming service “the ultimate fan offering” in 2022, so he clearly thinks offering such a product is a good idea, even if he disagrees with some of the tactics that Disney is currently pursuing to get the streamer to market.
Should Disney Pursue ESPN Partners, or Not?
In the CNBC interview Chapek discusses his own philosophies on what streaming can deliver to customers in terms of a personalized video experience as an argument for why ESPN should not need strategic partners to deliver content to fans via a new streaming service going forward.
It seems incumbent upon the market leader in sports, as ESPN, that they’ve got an opportunity to simplify this,” he said. “Streaming is all about satisfying the customers with a more personalized or customized type of experience. If anyone can play that role, it should be ESPN.”
But some of the strategic partners that Disney has been talking to can help ESPN boost the personalization factor which Chapek identifies as being so important. Consider the NFL; a recent report indicated that league topped the list of desired partners for ESPN. If the NFL did become a minority investor in ESPN, it could allow fans to completely deck out their new ESPN streamer’s interface with themes and wallpaper from their favorite football team. Fantasy football stats specific to each fan’s team could be integrated as well, along with betting lines and up-to-the-minute odds concerning a viewer’s most relevant games through the ESPN BET sportsbook. Similar features could be a big part of the plan if ESPN ends up partnering with the NBA, which is also a reported possibility.
A tech company like Google could also help Disney make streaming ESPN a more customized experience. Sports fans could link their ESPN streaming platform to their Google account, allowing them to tailor notification settings to be updated when their favorite sports teams are in a critical game moment and prompting them to watch the game live on whichever device they’re currently using.
Better streaming technology could also be at ESPN’s fingertips if it decides to sell a minority stake. If it teamed with Amazon, for example, it could get access to that company’s new tech for fighting latency, an industry term referring to the delay between when action happens live on the field or court, and when fans see it on their TV screen. Latency is a big problem in an age where many sports fans are following live action on social media sites to get instant analysis, as these viewers face the sporting event in question being spoiled if they’re watching a stream that is significantly behind the live-action in the stadium. But a partnership with Amazon could allow ESPN to dramatically trim the delay between live and when fans see a given play or series.
Chapek is certainly correct that Disney does not have to find a partner for ESPN to bring a new streaming platform to market if it does not want to. But current Disney brass seems to disagree, and many of the partners it has engaged with about potentially buying a piece of ESPN would allow the company to better customize a new ESPN streaming platform, as Chapek has indicated is key.
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