Activist investor Daniel S. Third Point’s Loeb announced his suggestion last month that Disney divest itself of ESPN in order to allocate more content creation resources to streaming platforms.
Loeb sent two messages on Twitter early Sunday morning that amounted to an olive branch to Disney and its CEO Bob Chapek. Loeb said he gained a “better understanding” of Disney’s plans to integrate ESPN more deeply into its consumer-oriented operations and the emerging Disney channel group. Social media messages indicate that Loeb will not escalate public pressure on Disney and seek to present a replacement slate of directors at the company’s annual meeting next spring.
“We have a better understanding of the potential of @espn as an independent company and another pillar of $DIS to reach a global audience to generate ad revenue and subscribers. We look forward to seeing Mr. Pietaro implement growth and innovation plans, leading to significant synergies as part of The Walt Disney Company,” Loeb wrote.
Loeb made headlines on August 15 when he issued an open letter to Disney calling for the company to sell ESPN and accelerate its acquisition of Comcast’s pending 33% stake in Hulu. Loeb reconsidered the argument that has been gaining traction in investor circles for more than a decade that ESPN and Disney would be better off as separate entities.
But in interviews with diverse And other media outlets Saturday on the back of the massive D23 Expo in Anaheim, Speck made it clear that he has no intention of splitting from ESPN, the sports TV powerhouse – quite the contrary. Tangle hinted that Disney is preparing for the future of its direct-to-consumer operations with a new platform that more deeply integrates ESPN along with the brands of Disney, Marvel, Lucasfilm, Pixar, ABC, National Geographic, 20th Century Studios and more on the Disney+ streaming platform. ESPN is a rare example of a long-term joint venture for Disney, in which Hearst Corp has held a 20% ownership stake in the world leader for decades.
“You can look at this from a couple of different ways, from a guest point of view or from a business point of view or a shareholder point of view. Does that actually make sense? And I think in Dan’s case he was asking the question more, is this the right business mix for the company?” diverse on Saturday. “Our investors only know what we have shared with them so far. They don’t really know what our plans are for the future. We have very ambitious plans for the sport.”
Chuckle also referred to long-term planning involving ESPN and Hulu, the two entities that Loeb targeted in his letter. Chubbak did not elaborate on the company’s plans but promised to provide a “more comprehensive expression” of the company’s plans, although he would not provide a timeline.
“The ad demand for ESPN speaks volumes. But what also speaks volumes is that when word got out on the street that maybe Disney was going to come out of ESPN, we had at least 100 inquiries from people who wanted to buy it. What does that tell you? That says that We have something really good about it. And if you have a strategic plan, a vision of where it fits into the company over the next 100 years, you don’t want to get rid of it completely. We have that plan,” he said.
Chapek has strongly indicated that he agrees with Loeb about the strategic importance of Disney’s purchase of the latter part of Hulu that it does not already own in order to make it part of Disney+’s bedrock.
“The first request we received from Disney+ subscribers was for more general entertainment,” said Chapek. “When people watch Dumbo with their kids and put them to bed, and it’s now 7:30 — those same people might not want to see Bambi, right? They want to see something else, something that is still Disney’s capital “D.” And the flexibility of that is broader Much more than we could have imagined, as demonstrated by our experience in Europe, on Disney+, where we have a lot of public entertainment on (the platform). The appetite for public entertainment is enormous. We have a lot of public entertainment content within The Walt Disney Company, and we don’t have the full capacity on using it because of the complex ownership situation we are facing (in Hulu), at least for the next 16 months.”
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