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A globe stands at the entrance to the ESPN Wide World of Sports complex in Lake Buena Vista, Florida.
Phelan M. Ebenhak via AP
Disney Chief Executive Officer Bob Iger said Thursday that he is open to the possibility of selling a stake in ESPN and is looking for a strategic partner in the business as he prepares to move the sports network to streaming.
Disney CEO David Faber told CNBC Thursday in an interview in Sun Valley, Idaho, that the linear TV business has deteriorated more over the past year than Iger expected. Disney announced yesterday that Iger has extended his contract through 2026 as CEO. He returned to run Disney last year after stepping down as CEO in 2020.
Iger said Disney has been in early talks with potential partners who could improve ESPN’s streaming service by expanding its distribution and adding content. Refusal to name specific partners. Disney currently owns 80% of ESPN. Hearst Communications owns the remaining 20%.
Disney has refrained from putting its flagship ESPN content on the ESPN+ streaming service as it continues to generate billions of dollars in revenue each year through traditional cable television. However, millions of Americans cancel their cable subscriptions each year, and that number has accelerated in recent years.
“The challenges are greater than I expected,” Egger said. “The disruption of the traditional television business is most notable. If anything, the disruption of that business has occurred to a greater extent than I knew.”
Iger said he’s becoming more confident in his thinking about when ESPN will launch its full direct-to-consumer offering. He declined to say when that would happen.
In addition to finding a strategic partner for ESPN, Iger said he’s open to selling or spinning off Disney’s legacy cable networks, including FX, NatGeo and its broadcast group, ABC Networks. Outside of ESPN, Iger said Disney would be “expansive” in its thinking about legacy cable and broadcast assets.
Iger said Disney plans to acquire Comcast’s minority stake in Hulu as planned. The two companies struck a deal in 2019 that would give Disney the option to buy Comcast’s minority stake at fair market value.
CNBC reported earlier this year that Comcast CEO Brian Roberts floated the idea of ​​Disney selling ESPN as part of Hulu negotiations when former Disney CEO Bob Chapek was still running the company. Disney rejected those overtures at the time.
Disclosure: Comcast is the parent company of NBCUniversal, which includes CNBC.
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