Conscious Uncoupling of Disney and ESPN?

[PGage]

Dylan Byers ran a piece in Puck yesterday describing high level conversations at Disney about spinning off ESPN. The linked story may be behind a paywall, but the gist is new Mouse CEO Chapek is less sentimentally attached to ESPN than was Iger. Wall Street thinks Disney is undervalued ($174/share vs $633/share for Netflix), in significant part because Disney is still anchored to legacy assets like ESPN, which while still very profitable are on a downward glide path, instead of the perceived ever upward trajectory of the pure streaming model like Netflix. Also, there is a perception that live sports has not yet shown it can be profitably transplanted to streaming. And even if it can, many of ESPN’s biggest deals are long term, and preclude streaming on ESPN+ or DIsney+.

ESPN, on the other hand, would be freed up to fully pursue what some analysts are seeing as the only growth strategy in linear sports programming, which is going all in with sports betting. We have discussed this trend here recently, but so far ESPN has only dipped its toes in this stream. Reportedly ESPN has been exploring licensing its name to a Sports Book, and the eventual vision is viewers placing standard and “micro-bets” on games from their phones while watching live. But the Disney brand does not seem to thrive with such an active connection to betting, so as is full exploitation of the sports betting opportunities is limited if ESPN stays in the Mouse House.

The report is not that this is close to happening, but has been ordered to be more seriously studied than ever before.

https://puck.news/could-disney-spin-off-espn/

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[PGage]

And now I see multiple stories like this below that Disney stock rose after the Puck story, then fell after Disney denied its accuracy.

https://www.bloomberg.com/news/articles/2021-10-15/disney-shares-whipsaw-as-report-on-espn-split-called-inaccurate

[Bob Jersey]

There's a teaser after a few grafs. They ask for your email or Apple or Google creds, let you read the rest, then solicit the full $ub through the channels you gave.   B

PGage, Oct 16th: