ESPN is still the “worldwide leader” in sports.
But the network’s leftward political drift damaged the bottom line.
And now ESPN is facing one major shake up that no one saw coming.
Disney bought ESPN back in 1995 as part of a deal with Cap Cities that also included ABC.
Now Disney CEO Bob Chapek is seriously considering selling off ESPN because it is a drag on the company’s ability to grow and compete with streaming giant Netflix.
“In recent weeks, Chapek has enlisted his closest deputies and his finance team to explore the strategic rationale for separating ESPN, two sources with knowledge of the matter tell me. In executive meetings and in at least one board meeting, conversations about the business have subtly shifted from an Iger-style defense of the company’s ownership of the asset to an open, if not yet decisive, question about whether to uncouple it. As one source with knowledge of the discussions told me, ‘There are now conversations happening regularly at Disney about whether or not to spin off ESPN,’” Dylan Byers of Puck Media wrote.
Disney stock is valued at $174 per share.
Netflix stock sits at $633 per share.
Byers reported Wall Street analysts believe that ESPN – which still generates $7 or $8 billion in profit per year – drags down Disney’s value because the linear TV model is dying.
ESPN will only lose subscribers every year as Americans cut the cord and get rid of cable.
Disney cannot transition ESPN to a purely streaming asset using the ESPN+ platform because ESPN has TV rights deals that extend into the next decade with the NFL, College Football, and the NBA.
The only way for Disney to compete with Netflix is to dump ESPN and become a purely streaming platform on Disney Plus.
ESPN thought embracing woke politics was the key to the network’s survival as the leftward turn would bring in a new audience.
Instead it sealed the channel’s fate.
Sports with Balls will keep you up-to-date on any new developments in this ongoing story.