The Walt Disney Co. has reportedly scrapped a rumored plan to spin off ESPN, reports Benzinga.
What Happened: Disney’s focus on keeping ESPN within its portfolio is the result of efforts by rival companies Amazon to obtain streaming rights to live sports events for their respective streaming services, according to industry-focused news site Puck citing an unnamed executive.
“This sudden turnaround almost certainly reflects a recognition that live sports, the linchpin of the entire linear ecosystem, will be even more significant to Disney’s bottom line in a world where the streaming landscape is uncertain,” wrote Puck’s Dylan Byers in a report from the Sun Valley Conference 2022 in Wyoming.
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Why It Matters: ESPN became a Disney through the 1996 acquisition of its then-parent company Capital Cities/ABC Inc.
Last October, Puck cited two unnamed sources who claimed there were “conversations happening regularly at Disney about whether or not to spin off ESPN.” The sports media brand is said to be burdened with “zero-to-low-growth business” due to a near-future of diminished subscriber levels and advertiser revenue.
Disney CEO Bob Chapek reportedly grew concerned over “expensive, long-term rights deals that keep the most popular sports programming on linear and off of ESPN+.”
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