Photo by Mike Windle/Getty Images for ESPN.
Walt Disney Company CEO Bob Chapek mysteriously said at the D23 Expo held over the weekend that he had big plans for ESPN, but didn’t put flesh on the bones until today. The D23 Expo is an annual event held in Anaheim for Disney fans, featuring special experiences, concerts, pavilions, presentations and sneak peeks.
In an exclusive interview with CNBC’s David Faber, Bob Chapek, CEO of Walt DisneyDIS
Company, said that the company really thought about adding sports betting – it just wanted a third party to process the bets (commonly called “handle”) via a partner.
It is probably due to the fact that Disney wants to maintain its family image, but also have some advantage from sports betting, which is expected to be a rapidly growing market. The movement in sports betting is probably the reason that activist investor Dan Loeb on September 11 backed down on his August suggestion (after making a $1 billion investment in Disney) that spin off ESPN.
To Goldman Sachs’ Communicopia & Technology Conference on September 14, Disney CEO Bob Chapek said that they could have a link from ESPN to an ESPN-branded sports betting site that “would not impact the equity of the brand for Disney, but it will probably have a very positive impact on the brand.” equity for ESPN because our younger audience demands this.”
He also said that the company is firmly committed to the sports giant. “The Walt Disney Company adds a lot to ESPN, and ESPN adds a lot to The Walt Disney Company… We think the Walt Disney Company is a place where ESPN can be maximized in terms of… that asset placed anywhere else. And as such, we have been quite firm supporters despite the tremendous market demand for us to sell or spin or there are many people who are interested in getting a piece of ESPN, but we like our own hand.
For some background, ESPN was launched by Getty Oil in 1979, ending 1980 with nearly 8 million subscribers, just behind the market leader in ad-supported networks, WTBS, which had close to 11 million subscribers. .
ABC made a deal to buy 15% of ESPN for $30 million and received a first right of refusal if a majority stake was ever sold. At the time, the duo launched a 50/50 pay-per-view joint venture for a sports PPV service, and Getty’s ESPN had the rights to a major sporting event.
In 1984, still in the red, Getty Oil, now owned by Texaco Inc., wanted out. ABC bought the 85% interest it did not already have from Texaco for $204 million. Ted Turner wanted badly to buy ESPN, but he was outbid and bidding for the sports rights became very competitive between ESPN and Turner’s WTBS.
Just five months after taking control of ESPN, ABC sold 20% to Nabisco for $60 million (a $300 million valuation that was significantly higher than the $240 million valuation when it bought 85% from Texaco).
In 1985, Capital Cities offered to take over ESPN for $3.5 billion. In 1989, following a $25 billion purchase of RJR Nabisco by Kohlberg Kravis Roberts, RJR Nabisco sold its 20% stake to Hearst Corp. for 175 million dollars – Hearst still has a 20% stake today.
Just five years later, the Walt Disney Company agreed to pay $19 billion for Capital Cities/ABC valuing its 80% stake at $2.6 billion. Fast forward to 2022 and the company is now very focused on streaming and will soon be in the growing sports betting market.
Leaving aside the issue of sports betting, strategically ESPN should remain in the Walt Disney Company at least until cable and satellite are no longer a significant revenue stream. That’s because media companies generally bundle all their cable networks together, which means that if you want ESPN, you have the license to the entire family of Disney Channels, and that’s huge (see table).
Cable networks with the participation of the ownership of the Walt Disney Company
Crime & A&E Networks Investigation
History in Spanish A&E Networks
Lifetime Movies A&E Networks
Lifetime Real Women A&E Networks
Military History A&E Networks
National Geographic Walt Disney Company.
