Disney CEO Bob Chapek speaks at the 2022 Disney Legends Awards during Disney’s D23 Expo in Anaheim, California on September 9, 2022.
Mario Anzuoni | Reuters
In his first public comments since Disney fired him as CEO in November 2022, Bob Chapek told CNBC he sees no reason for Disney-owned ESPN to add minority partners.
“Strategically, I don’t see any real advantage in bringing on another minority partner for ESPN,” Chapek said as part of the CNBC documentary “ESPN’s Fight for Dominance,” released Thursday, which chronicles the network’s digital strategy.
Disney CEO Bob Iger told CNBC’s David Faber in July that he would consider selling a minority stake in ESPN to bolster the sports network’s content or technology as it plans a new direct-to-consumer offering that , as he later said, should be introduced in autumn 2025.
The company has not yet announced a deal to sell a stake in ESPN. CNBC reported in August that the network had been in discussions with major American professional sports leagues, including the National Football League and the National Basketball Association, about possible partnerships or investments.
Disney owns 80% of ESPN and Hearst owns the other 20%, a structure that has been in place since 1996. By finding a partner, Disney wants to do this Improving the content, distribution and marketing of direct-to-consumer program ESPN, for which a price has not yet been set, Iger said during Disney’s quarterly earnings call in August.
Forming a partnership with one of the professional sports leagues could help secure future live rights, but could upset other media companies bidding against Disney for gaming packages. Bringing in a technology or telecommunications company like Verizon or Apple could give ESPN broader distribution opportunities by reaching a larger customer base.
However, it is unclear whether the sale of shares in ESPN will be required to reach an agreement. ESPN President Jimmy Pitaro, who also spoke to CNBC as part of the documentary, downplayed the need for the sports broadcaster to sell a stake in its business to establish a partnership with a league or other company.
“It’s not about justice,” Pitaro said. “This is not about these partners taking an ownership interest in ESPN. That’s something like Bob.” [Iger] said we’re very open to that, but this is about partnership and accelerating the launch or launch of the ESPN flagship.”
Chapek’s first interview since his release in 2022
Chapek’s comments are his first public comments since Disney’s board fired him about 16 months ago and brought Iger back as CEO. He and Iger, who remained Disney’s chairman, had a strained relationship that increasingly deteriorated throughout Chapek’s tenure as CEO, which lasted nearly three years from 2020 to 2022, as CNBC documented in September. Chapek declined to comment on anything other than ESPN’s future for the CNBC documentary.
While Chapek said he disagreed with the need to bring in a partner for strategic reasons, he acknowledged that Disney could do so to raise cash for Comcast’s one-third stake in Hulu, which Disney is agreeing to purchase has committed at least $8.6 billion.
“There is already a strategic minority partner in Hearst. So that would bring with it a second strategic minority partner,” Chapek said. “The advantage of this is of course that you make some money available. And given some talk between Comcast and Disney about the need to buy the final stake in Hulu to make it 100% owned by the Disney company, it’s possible they’re just looking for the money themselves.
ESPN Chairman James Pitaro at a New York Yankees baseball game at Yankee Stadium in New York City, June 19, 2019.
The Washington Post | The Washington Post | Getty Images
Hub for all sports
Chapek also discussed the vision he had as CEO of turning ESPN into a central hub to direct consumers to where a game is being streamed, regardless of which company owns the rights to broadcast it – a concept CNBC first discussed reported in March 2023.
“When I’m sitting on my Apple TV and I want to watch a movie, I have no idea if it’s on Prime or Netflix or Disney+ or Hulu or wherever it’s on,” Chapek said. “I find out by going to Apple TV, plugging in the movie I want to watch, and they direct me to exactly where that movie is. And then they connect me seamlessly without me having to end it and.” Go to another app to find the show in this app. I think ESPN should be that source for a central clearinghouse.
Adding one-stop navigation can help make ESPN the first stop for sports fans when they want to watch a game, even if Disney doesn’t own the rights to specific sports, Chapek said.
“How do you make yourself indispensable to sports viewers so that they stick with you as we evolve into the streaming world? I think solving this problem would be a great way to achieve this,” Chapek said.
WATCH: Bob Chapek talks the future of ESPN
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2024-03-21 10:00:01
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