Report: Disney CEO Rejects Activist Investor's Call For ESPN Spin Off

Disney Bob Chapek is said to have rejected activist investor Third Point's suggestion that the entertainment behemoth spin off sports network ESPN, according to Joshua Fineman, News Editor at Seeking Alpha.

Chapek he has been "deluged" with interest from companies interesting in buying ESPN this year on speculation the company may be considering selling the sports network, the Disney CEO told the Financial Times in an interview. Chapek said the interest showed showed him about the potential for the network.

He told the paper that he has a plan restore ESPN to its "growth trajectory." He also told the FT that he has "regular conversations" with Third Point head Dan Loeb that he described as “very collaborative, non-antagonistic and collegial."

Chapek's comments come after Third Point last month reported a new stake in Disney and suggested that ESPN be spun off from the overall company.  Dan Loeb also wants Disney to buy Comcast out of its remaining minority stake in Hulu.

Chapek told the FT that he would "love" to settle the Hulu issue soon, but Comcast appears to be reluctant.

Loeb and Third Point also suggested a cost-cutting program that would include disposal of underperforming assets, as well as suspending the cash dividend and using free cash flow for debt repayment, stock repurchases or organic investments. Disney responded to Loeb's suggestions at the time.

The Wall Street Journal reported Sunday Afternoon that Activist investor Dan Loeb signaled Sunday morning on Twitter that he is backing off his push to persuade Walt Disney Co. to spin off its popular sports television network ESPN.

The change of heart comes after Disney’s Chief Executive Bob Chapek said in media interviews at this weekend’s D23 Expo event—an annual gathering of Disney fans where the company announces new shows and films—that he has plans for ESPN to be a big growth engine and a large part of the company’s entertainment offerings.

“As Bob has said, ESPN is an integral part of The Walt Disney Company, and he believes that its full potential will continue to be realized as we execute against our strategic vision for the most trusted brand in sports,” said Disney spokeswoman Kristina Schake on Sunday.