Disney may consider spinning off ESPN into separate company
Disney is reportedly considering splitting ESPN into a completely separate company. CNBC is claiming that Disney CEO Bob Iger may opt to spin off the mammoth sports network as a last resort. Disney currently owns an 80% controlling stake in ESPN, with Hearst Communications holding the remaining 20%.
CNBC reports that Disney is currently trying to find a minority partnership to help invest in ESPN. The traditional sports television network has declined as cable/satellite subscribers continue to cancel their services. As revenue declines, Disney is looking for creative ways to save the network.
Sports leagues may become minority owners of network
One potential move is for Disney to partner directly with professional sports leagues. CNBC claims that the company has already held talks with the National Football League, Major League Baseball, National Basketball Association, and National Hockey League. Agreements with any of these top sports divisions would help Disney quite a bit.
However, these leagues may not exactly want to form a partnership with Disney/ESPN. Bidding wars by networks vying to grab broadcasting rights have fueled increased revenues for the leagues. Owning a minority stake in ESPN would essentially end these bidding wars.
Assuming deals with sports leagues do not pan out, Disney could be compelled to spin off ESPN. Disney has previously avoided the move because they want to remain in the sports business. Nevertheless, decreasing revenues at the network may force the company’s hand.
Disney also discussing partnership with tech company for ESPN
It was also revealed earlier in the week that Disney was interested in forming a partnership with Apple. The deal would potentially allow the massive tech company to distribute ESPN. According to the report by the New York Post, new iPhones could even come with the ESPN app pre-loaded onto the phones.
Iger previously stated that ESPN delivering a stand-alone streaming service is coming in the future. Although he would not reveal a timetable for the move back in February, it is now expected to arrive around 2025. This would help bring ESPN’s best content to the direct-to-consumer service.
ESPN currently owns soccer media rights here in the U.S. for Spain’s LaLiga, Germany’s Bundesliga, the Dutch Eredivisie, England’s Championship, and the FA Cup and League Cup.
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