Disney will dump ‘cash cow’ ESPN and ABC in late 2023, Wells Fargo predicts

video

Disney can ‘right the ship’ with Bob Iger back as CEO: Robert Schein

Blanke Schein Wealth Management CIO Robert Schein discusses what Disney’s management change could mean for their streaming and theme parks businesses on ‘The Claman Countdown.’ 

Walt Disney’s Bob Iger reprized his role as the company’s CEO in late November ‘to make big changes’ including parting ways with ESPN and ABC, Wells Fargo analysts predicted in a company note on Dec 20.

According to bank analysts, Iger will shift the mass media and entertainment company’s focus to content and cost rationalization while spinning-off broadcast network ABC and cable sports channel ESPN.

Spinning off the two networks is the best path forward and a probable late 2023 event, leaving the Walt Disney Company an attractive pure play intellectual property company, the bank predicted.

Jack Trice Stadium: Desmomd Howard, Rece Davis, Lee Corso and Kirk Herbstreit on the set of College GameDay Built by the Home Depot, Sept. 11, 2021. (Allen Kee / ESPN Images)

US ECONOMIC GROWTH REVISED UP TO 3.2% IN THIRD QUARTER IN SHOW OF RESILIENCY

While ESPN has been the cash cow of the pair, linear and sports trends are diverging from the core IP. In addition, the sports network is not owned-IP or global like Disney, so "we think severing the company is increasingly logical," the analysts stated. ESPN is owned 80% by Disney and 20% by Hearst Corporation.

The analysts also stated they think ESPN and ABC are integrally linked, and are moving away from their streaming contemporaries. They added that owned IP monetizes differently versus licensed IP in sports and will lead to the eventual spinoff of ESPN and ABC. 

Attendees are reflected in Disney+ logo during the Walt Disney D23 Expo in Anaheim, California on Sept. 9, 2022.  (Patrick T. Fallon/AFP via Getty Images / Getty Images)

NETFLIX TO OPEN $900M FACILITY AT FORMER FORT MONMOUTH ARMY BASE IN NEW JERSEY

A spin-off of ESPN by Disney has been long discussed by investors, the Wells Fargo note stated, while rationale for considering the spin is not financial engineering but portfolio improvement

In September, activist investor Dan Loeb called for a spinoff of ESPN but later backed off, after understanding the network's ability to generate ad and subscriber revenues.

Then CEO Bob Chapek said the company has a plan to restore ESPN to its "growth trajectory."

ESPN+ grew 42% for the year ending Oct 1 to 24.3 million subscribers. Disney+ was up 42% to 164.2 million subscribers.

FORMER DISNEY CHIEF BOB CHAPEK OUSTED AFTER CFO WORKED BEHIND HIS BACK, REPORT SAYS

The Disney Channal and ESPN both had 74 million linear subscribers.

CLICK HERE TO GET THE FOX NEWS APP

video

Disney parks hike ticket prices again

Kaltbaum Capital Management’s Gary Kaltbaum and Geltrude and Company founder Dan Geltrude discuss Disney World raising ticket prices and consumer spending habits amid inflation.

Source: Read Full Article