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Tuesday, April 16, 2024
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Disney Reportedly Exploring ESPN Spinoff

  • Disney is reportedly looking into spinning off ESPN, as the sports network's goals may be at odds with the rest of the company.
  • ESPN is more tied to linear broadcasting than other Disney properties through long term rights deals.
Mark J. Rebilas-USA TODAY Sports/Design: Alex Brooks

As Disney expands its streaming business, it’s reportedly considering cutting loose its property most tied to linear television: ESPN.

The news outlet Puck said that Disney CEO Bob Chapek asked top aides to look into a possible ESPN spinoff. Multiple private equity firms have reportedly approached Disney about the possibility.

In a separate report, a person close to Disney who wished to remain anonymous called the reports inaccurate.

The Mouse has found that its flagship sports network’s goals are sometimes at odds with other parts of the company.

  • Because ESPN commands $10 per cable subscriber per month from cable networks, Disney loses money anytime someone drops their cable subscription for ESPN+ ($6.99 per month of $69.99 per year).
  • ESPN is contractually tied to long-term rights deals with linear providers. Disney CEO Bob Chapek mentioned “constraints” around current rights contracts in August when discussing the possibility of combining Disney+, ESPN+, and Hulu.
  • Disney+ had 116 million subscribers as of July 3. ESPN+ had 14.9 million.

A split from the family-oriented Disney could allow ESPN to make a more fulsome embrace of sports betting.

The company is reportedly looking to license its name to a sportsbook in a deal worth at least $3 billion but has not yet launched its own betting platform.

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