Loeb reverses course on push to get Disney to spin off ESPN

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  • Activist investor Dan Loeb indicated in a tweet that he was about to drop his bid to have Disney spin off ESPN.
  • The tweet followed comments from Disney CEO Bob Chapek, who told reporters at the D23 Expo this weekend that he had big plans for ESPN.

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Activist investor Dan Loeb has said he is about to abandon his push to force Disney to spin off ESPN, reversing a stance he promoted less than a month ago.

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In a tweet Sunday morning, Third Point’s CEO said he sees the benefit of keeping the sports network as a separate vertical within the Disney conglomerate.

“We better understand the potential of @espn as a standalone business and another vertical for $DIS to reach a global audience for ad revenue and subscribers,” Loeb said.

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“We look forward to Mr. Pitaro delivering on growth and innovation plans, creating significant synergies within The Walt Disney Company,” he added, referring to Disney Chairman James Pitaro.

The tweet followed comments from Disney CEO Bob Chapek, who told reporters at this weekend’s D23 Expo that he had big plans for ESPN, though he didn’t go into details. Chapek told Variety that “we had at least 100 requests from people who wanted to buy” ESPN when it became known that it was potentially up for sale.

“What does this tell you? It shows that we have something really good,” he said. “And if you have a strategic plan, a vision of how he will fit into the company over the next 100 years, then you definitely do not want to get rid of him. And we have this plan. We didn’t share this plan. .”

Loeb’s reversal came after he acquired a new stake in Disney worth about $1 billion, or 0.4% of the company, in the second quarter. Disney shares are up about 6.5% over the past month. Loeb stepped down from his previous position at the company when the stock tumbled as interest rates soared.

The Disney official insists that ESPN is still considered an integral part of the company.

“As Bob said, ESPN is an integral part of The Walt Disney Company and he believes its full potential will continue to be realized if we act in accordance with our strategic vision of the most trusted brand in sports,” said Christina Shayk, spokeswoman for Disney. . chief communications officer.

At the core of his efforts to build ESPN was the belief that the new business could expand to include sports betting. He compared it to PayPal’s eBay subsidiary, “continuing to use the payment processing product.”

Along with the ESPN challenge, Loeb called on Disney to bring streaming giant Hulu directly to the Disney+ platform for direct consumer access. Comcast, the parent company of NBC Universal, has entered into an agreement to sell a 33% stake in Hulu to Disney two years later. Loeb recommended that Disney “make every effort” to acquire the remaining minority stake before the sale expires.

“We think it would even make sense for Disney to pay a modest premium to accelerate integration,” Loeb said in the letter. “We know this is a priority for you, and we hope that the deal will close before Comcast is contractually required to do so in about 18 months.”

Disclosure: CNBC is part of Comcast’s NBCUniversal..

Credit: www.cnbc.com /

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