Disney Could Spin ESPN Off Into Its Own Company
When Disney CEO brought back former executives Kevin Mayer and Tom Staggs back as consultants, he had one problem on his mind — ESPN.
As the rate of cable cancellations in the United States has increased, Disney has been desperate to find a way to keep ESPN profitable. Previously, the network could still generate revenue through increased programming fees, but that is no longer the case.
Iger knows that as ESPN’s revenue declines, it has the ability to drag Disney’s finances down with it, the question then, is what to do?
The Future Is Streaming
The ultimate outcome for ESPN will see the worldwide leader in sports transition to a direct-to-consumer format. When Disney does unleash a fully streaming version of ESPN however, more cable users will likely finally cut the chord.
To bring the network to streaming, Iger and ESPN chairman Jimmy Pitaro have been open in the fact that they would like to bring in strategic partners.
Strategic Partners
According to CNBC, Disney has been in talks with the major sports leagues about potentially partnering on ESPN.
While the NFL, MLB, NBA, and NHL are focused on bringing their sports to the new streaming-dominated landscape, a stake in the sports network could make that transition easier.
With that being said a partnership between ESPN and a major sports league would be unprecedented. Such a deal would raise issues over the integrity of the network’s reporting and could alienate the league’s other media partners.
Could Disney Spin Off ESPN?
If Disney can’t find the right partner for ESPN, it has not ruled out spinning off the network.
Iger has frequently resisted spinning off ESPN in the past, publically stating that he wants to stay in the sports business.
Mayer however, who previously ran Disney’s streaming business, had been more open-minded about spinning off the worldwide leader in sports when he worked at the company.
For now, at least, Iger, Pitaro, Staggs, and Mayer will look for a way to turn ESPN around within the confines of the company. If that proves impossible, however, don’t be surprised to see ESPN be spun off.
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! Also, thanks for reading!