ESPN wants minority partners: Disney CEO Bob Iger paid retiring executives Kevin Mayer and Tom Staggs to assist him address a challenging ESPN future challenge, a first. Mayer and Staggs share the Candle Media CEO position. These guys are Iger’s close pals who have assisted him without pay. They’re discussing ESPN and Disney’s linear cable networks with ESPN President Jimmy Pitaro.
Since US television subscribers are declining, Iger is looking for ways to revitalize ESPN. ESPN charged Comcast, Charter, and DirecTV extra for its shows to increase revenue. ESPN profited. No more. ESPN’s revenue loss will likely hurt Disney’s earnings. Because of this, Iger is considering several strategies.
Iger told CNBC’s David Faber that he is more confident than ever that ESPN will sell directly to customers. ESPN’s best content requires linear cable. ESPN+, Disney’s $9.99-a-month streaming service, airs many of its lower-rated live games.
If ESPN offers a la carte subscriptions, more consumers will cancel pay TV. ESPN delayed its direct-to-consumer initiative because of this.
Iger didn’t announce a direct-to-consumer ESPN program last month. It’s unlikely in 2023 or 2024, according to experts. ESPN’s spokesman declined comment. Iger wants non-majority ESPN stockholders. The sports network reportedly discussed the concept with the NFL, MLB, and NBA a month ago, according to CNBC.
According to sources, NHL representatives have participated in these conversations. The NHL declined comment.
ESPN could create history by selling part of itself to four major sports leagues. The leagues are focusing on adapting their products to a streaming-dominated market. ESPN could assist the leagues create an all-sports subscription service and negotiate new economics outside of the standard TV package. They could do this if they bought ESPN and leveraged its experience to establish such a service.
This could pose issues with their current media partners and force them to pick between two interests. Leagues would want ESPN to succeed if they owned stock. This may not maximize league sports rights revenue.
Media and tech titans like Comcast’s NBCUniversal, Fox, Paramount Global, Warner Bros. Discovery, Apple, Alphabet, and Amazon have competed for sports rights, increasing their value. A source says ESPN may spin off the network if it can’t find a solid minority partner deal.
Iger told CNBC that he would stay in sports. Mayer, who was senior vice president of corporate strategy at Disney before becoming head of the streaming business, was more amenable to spinning off ESPN, according to sources. Mayer runs streaming. Mayer left in 2020 to become TikTok’s CEO. He didn’t want to speak.
Iger told Faber a month ago that he wasn’t “necessarily” interested in spinning ESPN off into a stock-listed entity. Mayer, Staggs, and Pitaro want to find a way to maintain Disney’s controlling interest in ESPN, according to sources. Disney (80%) and Hearst (20%) own ESPN.
Iger wants commercial partners to help ESPN improve its content and messaging. If given the chance, another significant firm may want to buy a minority investment in ESPN. Disney could make company decisions if it owned most of the network.
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Our Reader’s Queries
Why ESPN wants two partners to buy into its future?
Disney is seeking two partners for ESPN in order to sell a portion of the sports network. The goal is for ESPN to team up with a digital company, like Apple, and a mobile platform, such as Verizon. This partnership would allow ESPN to maximize its sports assets by utilizing the top distribution channels available.
Who is the minority owner of ESPN?
Owned by The Walt Disney Company (with 80% ownership and operational control) and Hearst Communications (with 20% ownership), ESPN is a popular American international basic cable sports channel.
What is Disney trying to do with ESPN?
Disney CEO Bob Iger has announced plans to retain control of ESPN and explore the possibility of launching a streaming app for the network. This could involve forming a partnership or selling a portion of the network to a potential investor.
Is Disney going to sell ESPN?
Disney’s decision to retain ownership of the network is likely influenced by its impressive profit margins. ESPN raked in over $16 billion in Disney’s 2022 fiscal year, with a profit of $2.9 billion. The bulk of this revenue was generated from its domestic operations.