October 4, 2022
Disney Boss Rejects Dan Loeb’s Call to Shut Down ESPN

Walt Disney CEO Bob Chapek has rejected calls by active investor Dan Loeb to sell or spin off the ESPN sports television network, vowing to restore the business to its lifelong status as the company’s growth engine. Is.

Loeb, whose Third Point hedge fund disclosed in August that it had bought a $1 billion stake in the company, called on ESPN to reduce Disney’s debt burden — a sweeping plan to shake up the media company. only one element.

In an interview with the FT, Chapek said Disney had been “confused” by the interest of companies seeking to buy ESPN earlier this year, amid rumors that the company was weighing up sales of the cable network.

“If everyone wants to come in and buy it . . . I think it says something about the potential of it,” Chapek said. “I think the potential of it lies within the Disney company.”

He added: “We have a plan for that that will restore ESPN on its growth path,” Chapek said. “When the rest of the world knows what our plans are, they will be as confident of that proposal as we are.”

Following the comments, Loeb appeared to back down from his ESPN push. one in Tweet On Sunday morning, Loeb said that while Third Point “has a better understanding of ESPN’s potential as a standalone business,” he wants network chief Jimmy Pittaro to “create considerable synergy as part of The Vault, with growth and Looking forward to seeing the innovation plans being executed.” Disney Company. ,

ESPN broadcasts live sports in the US, including games from the National Football League, National Basketball Association, and Major League Baseball.

Bob Chapek speaks at the 2022 Disney Legends Awards during Disney’s D23 Expo on Saturday © REUTERS

In interviews, Chapek said he has “regular talks” with Loeb, who also took a 2020 stake in Disney that he sold earlier this year. He characterized the conversation as “very cooperative, non-conflict and collegial”, including around Loeb’s recommendations to change the structure of the Disney board.

Chapek defended the board, saying the average tenure is four years and that it has “a wide range of skills”.

But he added: “We are so consistent with Dan’s thinking that everything he talks about is either things we’ve considered in the past or are considering for the future.”

Loeb has also asked Disney to buy Comcast’s 33 percent stake in the Hulu streaming service before January 2024, when Disney has the option of buying the remaining stake. Some Wall Street analysts are also calling on Disney to settle ownership of Hulu as soon as possible.

Chapek said he would “love” to settle the matter as quickly as possible, but Comcast seems reluctant.

“We have spoken to him several times in the last one year,” he said. “If that was in the cards we would have loved to do it, but it takes two to tango.” He added that market sentiment has changed significantly since the settlement, when investors were more bullish on streaming.

Chapek spoke on the sidelines of the annual D23 convention in Anaheim, California, where the company revealed its streaming and theatrical slate to thousands of Disney fans. Disney shows trailers for two highly anticipated movies coming this autumn, Black Panther sequels wakanda forever And Avatar: The Path of Water,

It also previewed a run of the original series on Disney Plus, including a Star Wars prequel. internal management and and marvel series covert attack,

Chapek said the new slate represents the end of a Covid-induced production bottleneck. “This is our new steady state[of production],” he said, adding that the pace of production and the size of its materials budget – currently around $30bn – will remain level.

Disney has continued to add new customers to its streaming services this year, and by some measures its overall streaming operations have surpassed Netflix in subscribers. But Netflix’s revelation that it lost more than 1 million subscribers this year has rattled the entire streaming business, with investors worried over high content spending and struggling for a clear path to profitability.

Analysts said Disney’s theme park business is also recovering strongly despite the closure of parks in China. But shares are down 26.5 percent this year, while the S&P 500 is down 15.2 percent.

Chapek said Disney has “commercial momentum that’s enviable” in both the content and theme park businesses, but was suffering from investor “malaise” around streaming because of Netflix’s problems.

“For a long time we had the advantage of being like Netflix because we were a streaming company,” he said. “It is not unexpected that we will paint with the same brush [but] We are not the same company.”

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