In a regulatory filing, Disney has reported that ESPN profits are down 20%.
ESPN Profits Down, Disney Exploring Strategic Options
In the first nine months of the fiscal year, Disney’s sports bundle (ESPN, ESPN+, and ESPN television channels) reported profits down 20 percent, to $1.48 billion, as well as a decrease in sales to $13.2 billion, down 1.3 percent.
Potential partners include sports companies and Apple. Former Walt Disney Company executives Tom Staggs and Kevin Mayer are on the advisory board as the company considers their options, according to Axios. Disney attributes this loss primarily to the cord-cutting trend among consumers; a record 2.3 million households in the U.S. canceled their cable subscriptions.
Those options the company is considering include offering ESPN as a standalone streaming service as soon as 2025. First reported by the Wall Street Journal, this option is codenamed “Flagship.”
Though Disney CEO Bob Iger has been considering selling some television assets, ESPN is not currently on the chopping block with the company. Iger wants to hang onto ESPN, but is looking for a partner for the sports network.
Bob Iger isn’t known for selling. During his first tenure as Disney’s CEO, he acquired Pixar, Marvel, and Lucasfilm, which have all proven to be successful purchases.
According to Bloomberg, television generated 35 percent of Disney’s revenue ($24.8 billion) prior to the COVID-19 pandemic, and over 50 percent ($7.5 billion) of its operating income.
It’s also worth noting that Iger got his start not just in TV, but in ABC. He began working for the network in 1974, long before it was acquired by Disney. He performed menial labor on TV sets and worked his way up through the ranks. He was named head of ABC Entertainment in 1989. He was president of the ABC Network Television Group from January 1993 to 1994. He was named Capital Cities/ABC senior vice president in March 1993 and then executive vice president in July 1993. The next year, he was named president and COO of Capital Cities/ABC.
When The Walt Disney Company acquired ABC in 1995, they acquired Iger and he worked his way up to CEO of the entire company over the next decade, finally landing the top spot in 2005 after Michael Eisner was ousted. Iger was CEO until retiring in 2020, but returned to the position in November 2022 after Bob Chapek was also ousted.
What do you think of the possibility of a standalone ESPN streaming service? Will you be shifting to this, or are you cutting the cord as well? Let us know in the comments.