When Bob Iger returned to run the Walt Disney Company in November, he laid out plans for a major reorganisation of the company, and during this week’s quarterly investor call, he revealed that the company is being restructured into three divisions: Entertainment, ESPN and Parks, Experiences and Products.
The new ESPN division will see the ESPN+ streaming service move under them, following the closure of the DMED (Disney Media & Entertainment Division), along with the ESPN channel and international sports channels. This news instantly set speculation that Disney could be looking to spin off or sell ESPN in the future.
During the investor call, Bob Iger was asked about them selling ESPN, and he said, “We did not do it for that reason,” and explained:
“ESPN is a differentiator for this company, is the best sports brand and television, is one of the best sports brand in sports. It continues to create real value for us. It is going through some obviously challenging times because of what’s happened in linear programming. But the brand of ESPN is very healthy, and the programming of ESPN is very healthy. We just have to figure out how to monetize it in a disrupting and continuing disrupting world. That’s it.”
He explained the idea of selling off ESPN isn’t something that he wants to do:
“But we’re not engaged in any conversations right now or considering a spin off of ESPN that had been done by the way in my absence. And I’m told the company concluded after exploring it very carefully, that it wasn’t something the company wanted to do.”
The major shift to streaming is also causing problems with the traditional linear TV bundle, which often includes ESPN, as this was much more profitable for Disney, but Bob Iger explained how ESPN needs to shift to streaming:
“If you’re asking me is the shift inevitable? The answer is yes. But I’m not going to give you any sense of when that could be. Because we have to do it at a time that really makes sense for the bottom line and we’re just not there yet. And that’s not just about how many subscribers we could get, it’s also about what is the pricing power of ESPN, which obviously ties to the menu of sports that they’ve licensed.”
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Roger has been a Disney fan since he was a kid and this interest has grown over the years. He has visited Disney Parks around the globe and has a vast collection of Disney movies and collectibles. He is the owner of What's On Disney Plus & DisKingdom.