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JIM CRAMER THINKS ‘GETTING RID OF ESPN’ IS DISNEY’S PLAN
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jedclampett Offline
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Post: #21
RE: JIM CRAMER THINKS ‘GETTING RID OF ESPN’ IS DISNEY’S PLAN
(10-15-2020 07:21 PM)Frank the Tank Wrote:  
(10-15-2020 06:42 PM)quo vadis Wrote:  
(10-15-2020 06:31 PM)Sicembear11 Wrote:  
(10-15-2020 05:19 PM)quo vadis Wrote:  This doesn't make much sense to me. Far more important than the method of delivery is the ownership of valuable intellectual property, and ESPN owns a ton of valuable sports property. Plus, ESPN has proven to be a very adapt streaming platform. ESPN+ has done very well and can easily handle all of the current properties.

The only way this would make sense is if Disney just transferred all the ESPN sports properties to ABC, and then jettisoned the ESPN shell. Even then, the ESPN brand name has value.

ESPN is a money loser.

Covid aside, ESPN hasn't lost money in many, many years. Don't confuse declining subscriber base for actually losing money.

07-coffee3

Yes, this is true. While declining, ESPN is still actually the single most profitable segment of Disney BY FAR. It isn’t even close.

In contrast, Disney+ is a massive money loser as of now (despite what the general public might think). That’s not to say that it won’t turn profitable (which I have faith in happening) - it’s just going to take several years.

Sounds like a classic example of "killing the goose that lays the golden eggs."
(This post was last modified: 10-16-2020 02:09 AM by jedclampett.)
10-16-2020 02:08 AM
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Fighting Muskie Online
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Post: #22
RE: JIM CRAMER THINKS ‘GETTING RID OF ESPN’ IS DISNEY’S PLAN
I for one hope that the future is conference owned and operated, direct to the consumer streaming platforms
10-16-2020 06:27 AM
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JHS55 Offline
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Post: #23
RE: JIM CRAMER THINKS ‘GETTING RID OF ESPN’ IS DISNEY’S PLAN
(10-16-2020 06:27 AM)Fighting Muskie Wrote:  I for one hope that the future is conference owned and operated, direct to the consumer streaming platforms
this is what i’d like to see also, this would totally help the g5 conferences get stronger too
10-16-2020 07:07 AM
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ohio1317 Offline
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Post: #24
RE: JIM CRAMER THINKS ‘GETTING RID OF ESPN’ IS DISNEY’S PLAN
Given immediate financial problems at Disney, I could see this being in the cards. It is extremely profitable, but maybe not as core as it used to be. Meanwhile you have a company which just completed a string of buyouts, launched a major streaming service at great cost, and then all of a sudden shut down its parks (and attendance isn't back even where open), stop putting out movies to theaters, and is unsure what the future holds. It might make some sense to sell off ESPN now to get an immediate influx of cash and focus on your other areas.
10-16-2020 08:16 AM
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quo vadis Online
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Post: #25
RE: JIM CRAMER THINKS ‘GETTING RID OF ESPN’ IS DISNEY’S PLAN
(10-16-2020 08:16 AM)ohio1317 Wrote:  Given immediate financial problems at Disney, I could see this being in the cards. It is extremely profitable, but maybe not as core as it used to be. Meanwhile you have a company which just completed a string of buyouts, launched a major streaming service at great cost, and then all of a sudden shut down its parks (and attendance isn't back even where open), stop putting out movies to theaters, and is unsure what the future holds. It might make some sense to sell off ESPN now to get an immediate influx of cash and focus on your other areas.

That analysis implies the existence of other firms that are not struggling as much as Disney is. But except for the pure-tech companies, like Apple and Google or Microsoft that conduct most of their business online, there really are no such companies, everyone is suffering over covid.

It would be a very short-sighted move, IMO.
(This post was last modified: 10-16-2020 08:24 AM by quo vadis.)
10-16-2020 08:23 AM
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Carolina_Low_Country Offline
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Post: #26
RE: JIM CRAMER THINKS ‘GETTING RID OF ESPN’ IS DISNEY’S PLAN
ESPN just should have their own streaming platform for $12.99 or whatever it needs to be and allow cord cutters to get all the ESPN channels and ESPN+.
10-16-2020 08:33 AM
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quo vadis Online
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Post: #27
RE: JIM CRAMER THINKS ‘GETTING RID OF ESPN’ IS DISNEY’S PLAN
ESPN and Disney are in a good position to capitalize on streaming:

https://deadline.com/2020/06/disney-espn...202968442/
10-16-2020 08:36 AM
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orangefan Offline
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Post: #28
RE: JIM CRAMER THINKS ‘GETTING RID OF ESPN’ IS DISNEY’S PLAN
Some general observations:

- ESPN remains extremely profitable, but these profits are declining.
- The future of television is streaming.
- Streaming is a fundamentally different mechanism for monetization of programming than the cable bundle because it requires customers to "opt in" to pay for specific packages of programming.
- Sports programming will continue to enjoy strong consumer demand in the long term.
- ESPN has the strongest collection of sports rights of any player in the market.
- Disney has two streaming services, ESPN+ and Hulu, that have the potential to serve as platforms for the transition of high profile sports programming to streaming.

Disney has two options: 1) keep ESPN and oversee the transition of sports programming from cable to streaming, leveraging its experience from Hulu and Disney+, or 2) liquidate ESPN and let somebody else oversee the transition. Even a company in declining industry, in this case cable networks, can have substantial value to prospective investors because of its ability to generate significant cash flows. Potentially, there may be some investor out there that places more value on ESPN than Disney itself does. On the other hand, Disney may be able to achieve synergies through its ownership of ESPN that exceed the value other owner would be able to achieve.

A third option might be to for Disney to retain ESPN's streaming assets, ESPN+ and BAMTECH, allowing it to leverage its experience to pursue the benefits of the transition of sports to streaming while liquidating the value of its legacy business and assigning the risk of that business to another entity.

Ultimately, the question for Disney is how it believes it can maximize the value of its ESPN assets. There is both significant value remaining to be derived from legacy assets and a significant business opportunity in streaming sports programming in the long term. The decision of what to do with these assets will be driven by whether Disney believes sports programming is part of its core business and whether it believes it can achieve synergies from controlling ESPN that exceed the value that a prospective purchaser can achieve.
(This post was last modified: 10-16-2020 02:21 PM by orangefan.)
10-16-2020 09:07 AM
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goodknightfl Offline
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Post: #29
RE: JIM CRAMER THINKS ‘GETTING RID OF ESPN’ IS DISNEY’S PLAN
(10-15-2020 09:23 PM)MWC Tex Wrote:  
(10-15-2020 07:34 PM)SoCalBobcat78 Wrote:  
(10-15-2020 06:31 PM)Sicembear11 Wrote:  
(10-15-2020 05:19 PM)quo vadis Wrote:  
ESPN is a customer loser.

Yeah but if they keep making less and less money every year, why keep it?
Especially when the money they pay out increases, there is a point in time in very shortly where the revenue won’t be able to pay the expenses.
After the NBA and NFL fiasco with their politics and very low ratings, advertisers are now going to pony the dough.

I used to watch most sports, ESPN and Disney killed that for me. I didn't watch any Base ball, NFL, or NBA this year, and no college FB other than 2 UCF games. I no longer even pay for cable and not even the few extra $$ on my hulu bill for Espn+ and Disney+. Not worth the $$ to me.
10-16-2020 09:22 AM
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BePcr07 Offline
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Post: #30
RE: JIM CRAMER THINKS ‘GETTING RID OF ESPN’ IS DISNEY’S PLAN
I have cable and Disney+, not because I want them but because my family does and it’s not worth the inevitable headache getting rid of them.
10-16-2020 09:58 AM
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46566 Offline
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Post: #31
RE: JIM CRAMER THINKS ‘GETTING RID OF ESPN’ IS DISNEY’S PLAN
I think they keep ESPN. I'm curious on if they move what's left of ESPN3 to Hulu when they can? You can keep the important conferences on ESPN+ and move the smaller conferences to Hulu. With that Hulu could have more live sports. Would potential sports contracts be less if it's on hulu and not ESPN? Would say the Big West and the MAAC draw anything on Hulu for example then on a ESPN+? Maybe make a deal with USL and have them on Hulu?
10-16-2020 12:18 PM
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orangefan Offline
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Post: #32
RE: JIM CRAMER THINKS ‘GETTING RID OF ESPN’ IS DISNEY’S PLAN
(10-16-2020 12:18 PM)46566 Wrote:  I think they keep ESPN. I'm curious on if they move what's left of ESPN3 to Hulu when they can? You can keep the important conferences on ESPN+ and move the smaller conferences to Hulu. With that Hulu could have more live sports. Would potential sports contracts be less if it's on hulu and not ESPN? Would say the Big West and the MAAC draw anything on Hulu for example then on a ESPN+? Maybe make a deal with USL and have them on Hulu?

I agree. The cash flow that ESPN throws off provides a source of financing for the growth of Disney's streaming business and its profits, although declining, provide earnings stability as the streaming business reaches profitability and ultimately replaces ESPN as a profit engine. The primary reason to sell would be to address near term cash flow issues/financing needs that Disney appears able to address adequately without selling.

It is an interesting idea though.
(This post was last modified: 10-16-2020 02:57 PM by orangefan.)
10-16-2020 02:51 PM
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ChrisLords Offline
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Post: #33
RE: JIM CRAMER THINKS ‘GETTING RID OF ESPN’ IS DISNEY’S PLAN
(10-16-2020 09:58 AM)BePcr07 Wrote:  I have cable and Disney+, not because I want them but because my family does and it’s not worth the inevitable headache getting rid of them.

I have a similar reason. My 77 and 79 year old parents live with us and they have enough trouble using the cable remote that they've used for 20+ years. If I switched to a new service, I don't think they would be able to watch TV when I wasn't around.
10-16-2020 02:54 PM
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JRsec Offline
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Post: #34
RE: JIM CRAMER THINKS ‘GETTING RID OF ESPN’ IS DISNEY’S PLAN
(10-16-2020 02:51 PM)orangefan Wrote:  
(10-16-2020 12:18 PM)46566 Wrote:  I think they keep ESPN. I'm curious on if they move what's left of ESPN3 to Hulu when they can? You can keep the important conferences on ESPN+ and move the smaller conferences to Hulu. With that Hulu could have more live sports. Would potential sports contracts be less if it's on hulu and not ESPN? Would say the Big West and the MAAC draw anything on Hulu for example then on a ESPN+? Maybe make a deal with USL and have them on Hulu?

I agree. The cash flow that ESPN throws off provides a source of financing for the growth of Disney's streaming business and its profits, although declining, provide earnings stability as the streaming business reaches profitability and ultimately replaces ESPN as a profit engine. The primary reason to sell would be to address near term cash flow issues/financing needs that Disney appears able to resolve without selling.

The operative word is "transition". I think Disney transitions the aspects of ESPN it wants into the streaming format and does so over a number of years. What they would want and need most are the rights held in ESPN's name and if they ever liquidate ESPN or more likely a portion of it, I would think it would be after they converted the rights they wanted to Disney/ABC.
10-16-2020 02:58 PM
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AllTideUp Offline
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Post: #35
RE: JIM CRAMER THINKS ‘GETTING RID OF ESPN’ IS DISNEY’S PLAN
(10-16-2020 02:58 PM)JRsec Wrote:  
(10-16-2020 02:51 PM)orangefan Wrote:  
(10-16-2020 12:18 PM)46566 Wrote:  I think they keep ESPN. I'm curious on if they move what's left of ESPN3 to Hulu when they can? You can keep the important conferences on ESPN+ and move the smaller conferences to Hulu. With that Hulu could have more live sports. Would potential sports contracts be less if it's on hulu and not ESPN? Would say the Big West and the MAAC draw anything on Hulu for example then on a ESPN+? Maybe make a deal with USL and have them on Hulu?

I agree. The cash flow that ESPN throws off provides a source of financing for the growth of Disney's streaming business and its profits, although declining, provide earnings stability as the streaming business reaches profitability and ultimately replaces ESPN as a profit engine. The primary reason to sell would be to address near term cash flow issues/financing needs that Disney appears able to resolve without selling.

The operative word is "transition". I think Disney transitions the aspects of ESPN it wants into the streaming format and does so over a number of years. What they would want and need most are the rights held in ESPN's name and if they ever liquidate ESPN or more likely a portion of it, I would think it would be after they converted the rights they wanted to Disney/ABC.

And the thing about rights deals is that they expire in shorter terms. There's no such thing as buying up NFL or SEC rights and just owning them until you decide to sell them. That means ESPN is only as valuable as the content they own right now. Of course, that's true for everyone else.

That's actually the only thing that makes me think Disney might actually sell ESPN off...simply because they could just acquire the rights one way or the other without the bloated overhead of ESPN's infrastructure. What ESPN does well, anyone could do. Their infrastructure is designed for a very different era technologically and that's before you consider their on-air personalities that literally no one cares about.

With that said, the easiest thing to do is probably just to cut overhead within ESPN rather than selling it off. Disney will own the rights one way or the other and they can utilize ESPN's structure to specialize in what's worth their investment or not. Otherwise, they'll have to hire someone to make those decisions.

What they will have to do long term though is figure out a way to stream to large audiences. Right now, the cable technology is too efficient. It's easy to distribute a game at any given time to tens of millions of people. It's easy to advertise with existing platforms. What they have to overcome long term is the ease with which they have distributed their content using cable technology.
10-16-2020 04:11 PM
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AllTideUp Offline
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Post: #36
RE: JIM CRAMER THINKS ‘GETTING RID OF ESPN’ IS DISNEY’S PLAN
(10-16-2020 08:23 AM)quo vadis Wrote:  
(10-16-2020 08:16 AM)ohio1317 Wrote:  Given immediate financial problems at Disney, I could see this being in the cards. It is extremely profitable, but maybe not as core as it used to be. Meanwhile you have a company which just completed a string of buyouts, launched a major streaming service at great cost, and then all of a sudden shut down its parks (and attendance isn't back even where open), stop putting out movies to theaters, and is unsure what the future holds. It might make some sense to sell off ESPN now to get an immediate influx of cash and focus on your other areas.

That analysis implies the existence of other firms that are not struggling as much as Disney is. But except for the pure-tech companies, like Apple and Google or Microsoft that conduct most of their business online, there really are no such companies, everyone is suffering over covid.

It would be a very short-sighted move, IMO.

Your point is taken, but a large tech company could actually be the perfect buyer. They would have the capital and the knowhow to maximize ESPN's value into the next generation.

Not that I expect that to happen...I don't think Disney will sell ESPN, but the tech company that lands ESPN is in a really good position competitively.
10-16-2020 04:13 PM
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orangefan Offline
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Post: #37
RE: JIM CRAMER THINKS ‘GETTING RID OF ESPN’ IS DISNEY’S PLAN
(10-16-2020 04:13 PM)AllTideUp Wrote:  
(10-16-2020 08:23 AM)quo vadis Wrote:  
(10-16-2020 08:16 AM)ohio1317 Wrote:  Given immediate financial problems at Disney, I could see this being in the cards. It is extremely profitable, but maybe not as core as it used to be. Meanwhile you have a company which just completed a string of buyouts, launched a major streaming service at great cost, and then all of a sudden shut down its parks (and attendance isn't back even where open), stop putting out movies to theaters, and is unsure what the future holds. It might make some sense to sell off ESPN now to get an immediate influx of cash and focus on your other areas.

That analysis implies the existence of other firms that are not struggling as much as Disney is. But except for the pure-tech companies, like Apple and Google or Microsoft that conduct most of their business online, there really are no such companies, everyone is suffering over covid.

It would be a very short-sighted move, IMO.

Your point is taken, but a large tech company could actually be the perfect buyer. They would have the capital and the knowhow to maximize ESPN's value into the next generation.

Not that I expect that to happen...I don't think Disney will sell ESPN, but the tech company that lands ESPN is in a really good position competitively.

I don't see ESPN as being attractive to a tech company. ESPN's primarily business is as the owner of cable channels, a declining industry. If a tech company wants to own sports rights, it can bid for them. It wouldn't need to overpay for ESPN to get those rights, all of which expire at some point.

I would see a more likely potential acquirer to be a financial buyer, possibly a hedge fund or privately held company, that would use a highly leveraged capital structure to buy the company. The use of debt would allow it to lever up its equity return. This has been used in other declining industries.
(This post was last modified: 10-16-2020 06:52 PM by orangefan.)
10-16-2020 04:39 PM
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Post: #38
RE: JIM CRAMER THINKS ‘GETTING RID OF ESPN’ IS DISNEY’S PLAN
(This post was last modified: 10-16-2020 10:25 PM by domer1978.)
10-16-2020 10:24 PM
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RE: JIM CRAMER THINKS ‘GETTING RID OF ESPN’ IS DISNEY’S PLAN
(10-15-2020 11:55 PM)JRsec Wrote:  3. If Disney wanted to convert ESPN to all streaming (which is the more likely option as cable advances toward its end) think of the overhead Disney could cut simply by using the schools radio announcers as play by play for the streaming since the schools already pay them the payout would be minimal. What is the main expense at ESPN? Talking heads who bloviate about everything but the damned game and that's if they actually remember the name of the team in front of them. What is ESPN's highest negative? Their talking heads! Would you be happier with your school's play by play and color guy calling the games you streamed? I'd bet 90% or more would be.

And with streaming you could easily pick your audio stream. MLB.TV let's you pick between both TV/both Radio/Spanish or no announcers at all. It's wonderful
10-16-2020 10:41 PM
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Post: #40
RE: JIM CRAMER THINKS ‘GETTING RID OF ESPN’ IS DISNEY’S PLAN
I have a question how much overlap is there with people who have both Hulu and ESPN+? Could Hulu be used as the middle package from Disney+ and ESPN+. You can cut some ESPN overhead by like I mentioned earlier moving some conferences to Hulu at a lower rate since it's not on ESPN. Could possibly give a game of the week time of thing with the bigger conferences to simulcast on ESPN+ and Hulu. I'd figure the smaller conferences would pull around the same numbers on either hulu or ESPN+.
10-17-2020 12:53 PM
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