Money
Is ESPN about to leave the House of Mouse?
A new investor is calling on Disney’s boss Bob Chapek to spin off the giant sports entertainment network ESPN as its own separate company
Daniel Loeb’s Third Point owns one billion dollars of Disney’s stock.
In a letter to Disney’s CEO, Loeb says there’s a strong case the ESPN business should be spun-off from Disney.
The shares jumped as much as 2% on the news.
He says ESPN generates significant free cash flow for Disney but a separate entity would give ESPN the chance to pursue business interests that can’t be done while part of the Mouse House.
Disney makes more money from cable than any other media company thanks to ESPN.
Disney just came off a strong quarter, with streaming subscriber growth surpassing Netflix and blowing past estimates.
“We believe that it would even be prudent for Disney to pay a modest premium to accelerate the integration,” Loeb said in the letter.
“We know this is a priority for you and hope there is a deal to be had before Comcast is contractually obligated to do so in about 18 months.”
Disney responded to Loeb in a statement.
“We welcome the views of all our investors.”
disney statement
“As our third quarter results demonstrate, The Walt Disney Company continues to deliver strong financial results powered by world-class storytelling and our unique and highly valuable content creation and distribution ecosystem.”
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