Thursday, May 11, 2017

Analysts Talk ESPN With Bob Iger

Disney chief Robert Iger was peppered with questions from Wall Street analysts on Tuesday about the Mouse House’s embattled ESPN property, according to The NYPost.

During a TV interview, the usually upbeat, vigorous-looking Iger appeared a bit thinner and wearier as he was forced to play defense regarding the powerful and still highly profitable sports franchise — accepting ratings declines at ESPN’s flagship “SportsCenter” show and suggesting that over-the-top online offerings were better than traditional cable, satellite and telecom pay-TV technology.

“They’re more user-friendly, more mobile-friendly … more attractive to a younger generation of consumers, ” the 66-year-old CEO said.

Iger also suggested he should get some credit for being honest about the cracks in pay-TV subscriber numbers two years ago.

To be sure, in August 2015, when Iger conceded “some subscriber losses” at ESPN — the first cracks in the sports network’s seemingly impenetrable business model — Wall Street investors saw it as a worrisome sign for the whole sector, which sank 9 percent on the news.

Well, the worry is back on Wall Street. Disney stock was down 2.6 percent in after-hours trading, to $109.18, after the Burbank, Calif., company reported operating profits at its cable networks — its most profitable business, with operating profit margins at 44 percent — slipped 3 percent.

A half-million consumers dropped video packages from traditional providers in the three-month period ended April 1.

Iger aimed to calm fears about the turbulence in ESPN’s traditional distribution model by explaining that the sports giant has deals with new online-only packages to take up the slack.

Iger said that, by the end of 2017, ESPN will launch a direct-to-consumer streaming product that may have specific sports or be tailored to regions or be as long as a season.

Analysts have been laser-focused on ESPN’s declining subscriber counts. According to Nielsen, ESPN is currently distributed in 86.9 million households, down from 89.8 million during May 2016.

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