Walt Disney chief executive officer rejects Dan Loeb’s calls to spin off ESPN

Bob Chapek, Walt Disney chief executive officer


11th September 2022 – (New York) Bob Chapek, Walt Disney chief executive officer has rejected calls by activist investor Dan Loeb to promote or spin off the ESPN sports activities tv community, vowing to revive the enterprise to its onetime standing as a progress engine of the corporate.

Loeb, whose Third Point hedge fund revealed in August that it had purchased a $1bn stake within the firm, known as for ESPN to be spun off to cut back Disney’s debtload — only one factor of a sweeping plan to shake up the media firm.

In an interview with the FT, Chapek mentioned Disney had been “deluged” with curiosity from firms in search of to purchase ESPN earlier this 12 months amid rumours that the corporate was weighing a sale of the cable community.

“If everyone wants to come in and buy it . . . I think that says something about its potential,” Chapek mentioned. “I think its potential is within the Disney company.”

ESPN broadcasts dwell sports activities within the US, together with video games of the National Football League, National Basketball Association and Major League Baseball.

“We have a plan for it that will restore ESPN to its growth trajectory,” Chapek mentioned. “When the rest of the world knows what our plans are they will be as confident about that proposition as we are.”

Chapek mentioned he has “regular conversations” with Loeb, who additionally took a stake in Disney in 2020 that he bought early this 12 months. He characterised the conversations as “very collaborative, non-antagonistic and collegial”, together with round Loeb’s suggestions to alter the composition of the Disney board.

He defended the board, saying that the common tenure is 4 years and has a broad “range of skillsets”.

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

Loeb has additionally known as on Disney to buy Comcast’s 33 per cent stake within the Hulu streaming service sooner than January 2024, when Disney has the choice to buy the remaining stake. Some analysts on Wall Street are additionally calling for Disney to settle the Hulu possession quickly.

Chapek mentioned he would “love” to settle the matter sooner however that Comcast has appeared reluctant.

“We have talked to them numerous times over the past year-plus,” he mentioned. “If that were in the cards we would love to do that, but it takes two to tango.” He famous that market sentiment has modified considerably because the settlement was struck, when buyers have been extra bullish on streaming.

Chapek spoke on the sidelines of the annual D23 convention in Anaheim, California, the place the corporate revealed its streaming and theatrical slate to 1000’s of Disney followers. Disney confirmed off trailers of two extremely anticipated movies coming this autumn, the Black Panther sequel Wakanda Forever and Avatar: The Way of Water.

It additionally previewed a run of authentic sequence on Disney Plus, together with the Star Wars prequel Andor and the Marvel sequence Secret Invasion.

Chapek mentioned the brand new slate represented the tip of a Covid-induced manufacturing bottleneck. “This is our new steady state (of production),” he mentioned, saying that each the tempo of manufacturing and the scale of its content material funds — at the moment about $30bn — would stay degree.

Disney has continued so as to add new clients to its streaming companies this 12 months, and by some measures its general streaming operations have surpassed Netflix in subscribers. But Netflix’s revelation that it has misplaced greater than 1mn subscribers this 12 months has solid a pall over the complete streaming enterprise, with buyers rising involved over excessive content material spending and clamouring for a transparent path to profitability.