Changes Are Coming to ESPN
On Wednesday’s earning call, Disney CEO Bob Iger announced a massive restructuring of the Walt Disney company.
Under the new corporate structure, there will be three divisions, with Disney owned ESPN now separated from the rest of Disney media.
While ESPN continues to be a household name, the company has also been a headache for the Disney Company in recent years as it continues to operate at a loss.
Could Disney Spinoff ESPN?
With ESPN draining the Walt Disney Company’s resources, there have previously been whispers that the company would spin off ESPN into its own entity.
Although Bob Iger confirmed that the idea of spinning off ESPN was explored under Bob Chapek’s reign, he emphasized the value the company still has for Disney.
Photo: Chip Somodevilla/Getty Images
“ESPN is a differentiator for this company. It’s the best sports brand in television. It’s 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 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 continuing, disrupting world. That’s it. But we’re not engaged in any conversations right now or considering a spinoff of ESPN.” he said
Former CEO Bob Chapek explored spinning ESPN off. Photo: CNBC
For now at least, it appears as if Disney feels that ESPN is intricate to their company value. With that being said, the bottom line is still the bottom line.
“More Selective” on Television Rights Deals
In reference to ESPN’s continuing profitability struggles, Iger suggested that ESPN chief Jimmy Pitaro and Disney, may have to be more selective about sports deals in the near future.
ESPN head Jimmy Pitaro Photo: Disney
The big question surrounding the flagship station, will be the upcoming negotiations over television rights with the National Basketball Association.
Disney currently shares those rights with Warner Bros. Discovery, but that deal will lapse after the 2024-2025 season. Based on on recent sports rights deals, the price of re-upping with the NBA will increase dramatically.
Image Credit: Disney/NBA
A Streaming-First Business
In an ever-changing media landscape, Bob Iger also told investors that ESPN becoming a streaming-first business was an inevitability.
Photo: ESPN+
“Regarding ESPN and when we might make the shift, 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, obviously, at a time that really makes sense for the bottom line. And we’re just not there yet,” he said. “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 that they’ve licensed.”
Photo: ESPN
As Disney continues to remain firm in its commitment to ESPN, one thing is clear. The future of the sports giant will certainly look different than its present. Whether that be the medium that it is broadcast on, or the type of programming it airs, things will be changing at ESPN.
Thanks for visiting MickeyBlog.com! Want to go to Disney? For a FREE quote on your next Disney vacation, please fill out the form below and one of the agents from MickeyTravels, a Diamond level Authorized Disney Vacation Planner, will be in touch soon! Thanks!
