Disney unveils a new corporate structure for ESPN
The GIST: Disney is envisioning a whole new world for ESPN. The media conglomerate unveiled a new corporate structure on Wednesday, separating the sports broadcaster from the rest of Disney’s linear TV networks without formally spinning it off.
The details: CEO Bob Iger said Disney is trying to “figure out how to monetize” ESPN through the restructure and implied that the sports powerhouse must thoughtfully pick and choose its broadcast deals in the short term. Iger also revealed that ESPN will eventually prioritize streaming over TV but didn’t set a timeline for the transition.
- ESPN is still the king of cable — the company earns $8 a month per linear subscriber, the most of any channel. That said, ESPN’s 2023 yearly cable profits are projected to shrink for the first time ever.
The context: The restructure includes cutting costs by $5.5 billion and shedding around 7K jobs and surprisingly follows an earnings report that beat projections. Disney’s streamers reduced losses by $400 million compared to the previous quarter, and its domestic theme parks posted $2.1 billion in operating profit.
The lingering questions: Amid a company-wide cost-cutting effort, Iger suggested that loading up on pricey media rights deals isn’t an option for ESPN. The broadcaster still wants to renew its multibillion-dollar contract with the NBA, which begs the question: What other sports packages will provide the most bang for ESPN’s buck?
- Women’s sports arguably fit this bill. Rights fees are undoubtedly increasing, but they’re still more affordable than their men’s sports counterparts and promise exponential audience growth. A new fantastic point of view.