Is Disney planning to sell ESPN? It sounds like at least a piece of the Worldwide Leader in Sports could be on the market.
Disney CEO Bob Iger was on CNBC Thursday morning to discuss his new contract with the company. During the interview with David Faber, he was asked how Disney feels about ESPN as much has been made of future plans for the network.
Iger was very clear that Disney still wants to be in the sports business, but he said the company has to keep an open mind about the future of ESPN.
“It’s an advertiser’s dream. There’s a great demographic there,” Iger said. “It lends itself to technology in many ways, both in terms of coverage, distribution and consumption. And our position in that business is very unique. We have a great brand, we’ve had a great business, and we want to stay in that business. That said, we’re going to be open-minded there too, not necessarily about spinning ESPN off, but about looking for strategic partners that could either help us with distribution or content, but we want to stay in the sports business.”
When pressed for details or desires when it comes to a strategic partnership, Iger declined to answer, reiterating that Disney wants to stay in the sports business.
Faber cited the rising costs to operate ESPN as rights fees for live games continue to skyrocket. He pointed to a recent deal with the NFL and upcoming negotiations to retain rights to the NBA as examples. He referred to it as “renting the content that essentially keeps this thing alive.”
“I know a lot has been said about renting versus owning,” Iger responded. “If you can rent it and continue to be profitable from renting it, which we have been and we believe we will continue to be, then there’s real value in staying in it.”
There are a number of different ways Disney could utilize a strategic partner in ESPN. It could be a simple financial investment. It could also be helping transition the network from a linear TV product to something available direct-to-consumer.
