An activist investor is calling on Disney
to let one of the biggest names in sports media chart its own course.
Daniel Loeb’s Third Point has upped its stake in The Mouse — and penned a letter to CEO Bob Chapek calling on him to spin off ESPN.
“ESPN would have greater flexibility to pursue business initiatives that may be more difficult as part of Disney, such as sports betting,” Loeb wrote, adding that “most arrangements between the two companies can be replicated contractually.”
Disney has reportedly explored spinning off ESPN, so the latter could pursue sports betting without conflicting with Disney’s family-friendly brand.
Chapek said last year that Disney’s research found “a very significant isolation” in the public perceptions of Disney and ESPN, implying such a move might not impact Disney too much.
Sports betting appears to be coming to ESPN one way or another: In a call with investors following an earnings release last week, Chapek said Disney was in talks with sports betting companies to integrate betting opportunities during sports broadcasts.
“Our sports fans that are under 30 absolutely require this type of utility,” Chapek explained.
Quite a Quarter
Disney’s revenue rose 26% year-over-year to $21.5 billion in the fiscal quarter ending July 2. ESPN+ subscribers leapt 53% to22.8 million. Disney+ surpassed analyst expectations in reaching 152.1 million subscribers.
Both Chapek and Tim Bunnell, ESPN’s senior VP of programming and acquisitions, have described ESPN+ as vital to ESPN’s future.
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