ESPN makes a bunch of money for Disney. Sure its overhead and operating expenses are extremely high. With that being said you have to spend money to make money. I can’t see Disney being willing to walk away from the cash cow that is ESPN.


ESPN+ continues to grow and counted 11.5 million subscribers as of Dec. 2, with Disney now forecasting it will 20 million to 30 million subscribers by the end of fiscal year 2024. Early next year, ESPN+ will become available through the Hulu LLC interface, where subscribers can sign up and access the content within the Hulu app.


Another opinion from S&P Global

“ ESPN charts streaming growth, but cable network still Disney's No. 1 sports star”

“Meanwhile, network ESPN remains at the top of the traditional TV ecosystem as the most expensive basic-cable channel. Kagan, a research unit within S&P Global Market Intelligence, estimates that ESPN alone will drive some $7.34 billion in affiliate in annual affiliate fees in 2020, based on an average subscriber base of 80.1 million and an average monthly per-subscriber fee of $7.64. As to 2021, Kagan estimates that ESPN will generate just under $7.90 billion in affiliate revenue on an average per-monthly fee of $8.97 across 73.4 million subscribers.”


https://www.spglobal.com/marketintellige...r-61709716

(08-15-2022 02:30 PM)johnbragg Wrote:  

(08-15-2022 01:05 PM)Skyhawk Wrote:  

(08-15-2022 01:02 PM)Captain Bearcat Wrote:  ESPN made perfect sense for Disney back when sports on network TV was a large part of the TV landscape. There were a lot of synergies between ABC Sports broadcasts and ESPN broadcasts. Today, those synergies are largely non-existent.

Today, there's two relatively new synergies: the ESPN Wide World of Sports complex at Disney World, and the streaming bundle with ESPN+, Hulu+, and Disney+. Although I have no idea how big those synergies are.

If espn is spun off, I wonder if abc would regain/retain the "wide world of sports" branding, yellow jackets and all.

If there's a corporate breakup, I think ABC makes more sense under the ESPN umbrella than under the Disney umbrella. If Disney can license the Simpsons back to Fox, they can license The Conners and Abbott Elementary and whatever else to ABC.

Oh, I've long thought they should rebrand the ABC network to ESPN (rename the espn cable channel to ESPN1), move the scripted programming to Disney+ streaming (or to other networks), and then Disney retains the ABC name for the tv production studios, etc. Fold this new network and stations into espn, but disney keeps the production studios and the abc brand name. similar to the fox split.

Then, if they spin off this espn company, which would thus include this new espn network, Disney would be free to buy a different ota network if they wanted to - also known as having your cake, and eating it too : )

This new ESPN ota network turns the ota paradigm on its proverbial head. And Disney is free to be a supplier of content everywhere.

Oh and, doing this also could mean Disney could take a hard look at perhaps acquiring NBCUniversal. (Which would make the hulu issues moot, and also resolve certain things like the Hulk, and what to do with non-kid-friendly product...) Roughly 100B for Netflix, or 100B for NBCU - which would you pick? : )

(08-15-2022 12:43 PM)Attackcoog Wrote:  

(08-15-2022 12:26 PM)Claw Wrote:  ESPN is the only Disney asset producing new content. The rest is regurgitation of a large catalog.

Thats not actually true. Lots of new content development going on at Disney Studios and within ABC. ...

including that tiny Star Wars franchise.

(08-15-2022 02:54 PM)CardinalJim Wrote:  ESPN makes a bunch of money for Disney. Sure its overhead and operating expenses are extremely high. With that being said you have to spend money to make money. I can’t see Disney being willing to walk away from the cash cow that is ESPN.


ESPN+ continues to grow and counted 11.5 million subscribers as of Dec. 2, with Disney now forecasting it will 20 million to 30 million subscribers by the end of fiscal year 2024. Early next year, ESPN+ will become available through the Hulu LLC interface, where subscribers can sign up and access the content within the Hulu app.


Another opinion from S&P Global

“ ESPN charts streaming growth, but cable network still Disney's No. 1 sports star”

“Meanwhile, network ESPN remains at the top of the traditional TV ecosystem as the most expensive basic-cable channel. Kagan, a research unit within S&P Global Market Intelligence, estimates that ESPN alone will drive some $7.34 billion in affiliate in annual affiliate fees in 2020, based on an average subscriber base of 80.1 million and an average monthly per-subscriber fee of $7.64. As to 2021, Kagan estimates that ESPN will generate just under $7.90 billion in affiliate revenue on an average per-monthly fee of $8.97 across 73.4 million subscribers.”


https://www.spglobal.com/marketintellige...r-61709716

Yes - I think way too many people see the cord cutting numbers and assume that it must mean that ESPN is losing money. That's far from the case - ESPN is still the single biggest cash cow in the entire Walt Disney Company. The subscriber fee rate has increased enough to compensate for lost subscribers that they're still making more total subscriber fee revenue than before.

Now, the long-term risk is that this may not be possible to keep up forever, so eventually the ESPN mothership is going to need be part of an over-the-top a la carte service, whether it's integrated into ESPN+ or a tile on Disney+. It's just that ESPN is still generating so much cash (and it's still growing in terms of actual revenue) that it's tough for Disney to just give that up, particularly when it's having to incur large losses in order to invest in building its streaming platforms.

(08-15-2022 03:00 PM)PlayBall! Wrote:  

(08-15-2022 12:43 PM)Attackcoog Wrote:  

(08-15-2022 12:26 PM)Claw Wrote:  ESPN is the only Disney asset producing new content. The rest is regurgitation of a large catalog.

Thats not actually true. Lots of new content development going on at Disney Studios and within ABC. ...

including that tiny Star Wars franchise.

Even more so with Marvel. That's just a content-generating monster.

(08-15-2022 04:03 PM)Frank the Tank Wrote:  

(08-15-2022 02:54 PM)CardinalJim Wrote:  ESPN makes a bunch of money for Disney. Sure its overhead and operating expenses are extremely high. With that being said you have to spend money to make money. I can’t see Disney being willing to walk away from the cash cow that is ESPN.


ESPN+ continues to grow and counted 11.5 million subscribers as of Dec. 2, with Disney now forecasting it will 20 million to 30 million subscribers by the end of fiscal year 2024. Early next year, ESPN+ will become available through the Hulu LLC interface, where subscribers can sign up and access the content within the Hulu app.


Another opinion from S&P Global

“ ESPN charts streaming growth, but cable network still Disney's No. 1 sports star”

“Meanwhile, network ESPN remains at the top of the traditional TV ecosystem as the most expensive basic-cable channel. Kagan, a research unit within S&P Global Market Intelligence, estimates that ESPN alone will drive some $7.34 billion in affiliate in annual affiliate fees in 2020, based on an average subscriber base of 80.1 million and an average monthly per-subscriber fee of $7.64. As to 2021, Kagan estimates that ESPN will generate just under $7.90 billion in affiliate revenue on an average per-monthly fee of $8.97 across 73.4 million subscribers.”


https://www.spglobal.com/marketintellige...r-61709716

Yes - I think way too many people see the cord cutting numbers and assume that it must mean that ESPN is losing money. That's far from the case - ESPN is still the single biggest cash cow in the entire Walt Disney Company. The subscriber fee rate has increased enough to compensate for lost subscribers that they're still making more total subscriber fee revenue than before.

Now, the long-term risk is that this may not be possible to keep up forever, so eventually the ESPN mothership is going to need be part of an over-the-top a la carte service, whether it's integrated into ESPN+ or a tile on Disney+. It's just that ESPN is still generating so much cash (and it's still growing in terms of actual revenue) that it's tough for Disney to just give that up, particularly when it's having to incur large losses in order to invest in building its streaming platforms.

Agreed
Those advocating just sell ESPN don’t understand business and certainly not a business like Disney during these tough economic times.

Why walk away from a guaranteed significantly large revenue stream? Especially when inflation is almost double digit. Attendance at Disney parks is going to be affected.

As you said, sometime in the distant future, when the economy is stronger, if ESPN starts losing money, then you look to sell.

Live sports are one of the few investments, beyond alcohol and Pharma, that will grow during a bear market.

Please sell Star Wars and Marvel, Disney has screwed it up enough.


Sent from my iPhone using Tapatalk

(08-16-2022 05:59 AM)CardinalJim Wrote:  

(08-15-2022 04:03 PM)Frank the Tank Wrote:  

(08-15-2022 02:54 PM)CardinalJim Wrote:  ESPN makes a bunch of money for Disney. Sure its overhead and operating expenses are extremely high. With that being said you have to spend money to make money. I can’t see Disney being willing to walk away from the cash cow that is ESPN.


ESPN+ continues to grow and counted 11.5 million subscribers as of Dec. 2, with Disney now forecasting it will 20 million to 30 million subscribers by the end of fiscal year 2024. Early next year, ESPN+ will become available through the Hulu LLC interface, where subscribers can sign up and access the content within the Hulu app.


Another opinion from S&P Global

“ ESPN charts streaming growth, but cable network still Disney's No. 1 sports star”

“Meanwhile, network ESPN remains at the top of the traditional TV ecosystem as the most expensive basic-cable channel. Kagan, a research unit within S&P Global Market Intelligence, estimates that ESPN alone will drive some $7.34 billion in affiliate in annual affiliate fees in 2020, based on an average subscriber base of 80.1 million and an average monthly per-subscriber fee of $7.64. As to 2021, Kagan estimates that ESPN will generate just under $7.90 billion in affiliate revenue on an average per-monthly fee of $8.97 across 73.4 million subscribers.”


https://www.spglobal.com/marketintellige...r-61709716

Yes - I think way too many people see the cord cutting numbers and assume that it must mean that ESPN is losing money. That's far from the case - ESPN is still the single biggest cash cow in the entire Walt Disney Company. The subscriber fee rate has increased enough to compensate for lost subscribers that they're still making more total subscriber fee revenue than before.

Now, the long-term risk is that this may not be possible to keep up forever, so eventually the ESPN mothership is going to need be part of an over-the-top a la carte service, whether it's integrated into ESPN+ or a tile on Disney+. It's just that ESPN is still generating so much cash (and it's still growing in terms of actual revenue) that it's tough for Disney to just give that up, particularly when it's having to incur large losses in order to invest in building its streaming platforms.

Agreed
Those advocating just sell ESPN don’t understand business and certainly not a business like Disney during these tough economic times.

In fairness, the investor isn't suggesting dumping ESPN, they're suggesting splitting ESPN into a separate company so they can be more flexible (chase gambling revenue streams without having to worry about how Atlantic City / Las Vegas sleaze fits with Mickey Mouse and the theme parks). Disney stockholders would go to bed owning 100 shares of Disney stock, wake up holding 100 shares of Disney and 100 shares of ESPN.

Quote:Why walk away from a guaranteed significantly large revenue stream? Especially when inflation is almost double digit. Attendance at Disney parks is going to be affected.

As you said, sometime in the distant future, when the economy is stronger, if ESPN starts losing money, then you look to sell.

Ehh, if you're going to sell at all, you sell when it has value. If you wait until you've squeezed all the profit out of ESPN, why is the next guy going to buy it?

In the most recent quarter, Disney's Domestic Networks segment produced $2.075 billion in operating income on $5.700 billion in revenue. ESPN and its sister networks are a major portion of this.

Disney's corporate strategy is to build up operating income from streaming as operating income from linear networks decline. If it were to sell a significant part of its linear network portfolio it would receive a significant amount of cash that it could use to pay down debt, but it would take a huge hit to operating income.

That said, every business owner must consider whether the value that it can achieve from its assets is greater than the value that some other owner could achieve. If someone else can manage the assets to greater success, the assets are worth more to them than to you and you should consider selling.

Therefore, Disney should be periodically undertaking an exercise to determine whether ESPN may be more valuable to another owner than to Disney. This would include an analysis of whether ESPN continues to provide synergy with Disney's long term streaming strategy and whether it may provide synergy with someone else's business where it could create more value.

Offhand, the categories of potential owners that occur to me are other major players in the streaming industry looking to use sports to grow their business (Amazon and Netflix come to mind) and major players in the sports betting industry who could use the ESPN platform to promote their gaming business. Certainly with respect to the streaming side, it is difficult to see how or why another player could achieve greater benefits from owning ESPN than Disney. With respect to sports betting, it is not clear any company has achieved the scale to justify an investment as large as ESPN.

(08-15-2022 02:10 PM)mufanatehc Wrote:  

(08-15-2022 12:56 PM)DavidSt Wrote:  Hulu could go back to showing free stuff since they have Disney +. CBS/Viacom now owns Pluto TV, and it is mainly free service, but CBS Access is is paid. Fox owns Tubi TV which is free.

Hulu has Disney's live streaming service, plus serves as an outlet for all of the Fox stuff they acquired like American Horror Story, Prey, It's Always Sunny, and the various R rated movies that don't really fit a Disney branded product. I don't think they can really merge it into Disney+ without backlash from parents groups and at least a moderate ding to the Disney brand's family friendly reputation.

Disney has already lost it's family friendly reputation. My kids grew up here in central Florida, we had planned to take a Disney trip as soon as youngest kid hit 6 years old, They have cancelled Disney+ on TV, and no longer want to take the kids there.

(08-16-2022 08:30 AM)orangefan Wrote:  In the most recent quarter, Disney's Domestic Networks segment produced $2.075 billion in operating income on $5.700 billion in revenue. ESPN and its sister networks are a major portion of this.

Disney's corporate strategy is to build up operating income from streaming as operating income from linear networks decline. If it were to sell a significant part of its linear network portfolio it would receive a significant amount of cash that it could use to pay down debt, but it would take a huge hit to operating income.

Not what my dude is suggesting. He's suggesting a spinoff.

Quote:That said, every business owner must consider whether the value that it can achieve from its assets is greater than the value that some other owner could achieve. If someone else can manage the assets to greater success, the assets are worth more to them than to you and you should consider selling.

Sorta kinda on point. An ESPN outside the Disney umbrella would be able to pursue revenues in gambling, pro wrestling, UFC if that ever comes on the market again.

Quote:Therefore, Disney should be periodically undertaking an exercise to determine whether ESPN may be more valuable to another owner than to Disney. This would include an analysis of whether ESPN continues to provide synergy with Disney's long term streaming strategy and whether it may provide synergy with someone else's business where it could create more value.

Disney+ definitely provides synergies to ESPN+. Less certain that ESPN+ provides much synergy to Disney+. Although maybe within Disney Streaming, sports is the real revenue growth opportunity?

Quote:With respect to sports betting, it is not clear any company has achieved the scale to justify an investment as large as ESPN.

Might have the predator-prey relationship reversed there. It would be ESPN (possibly including ABC?) buying or contracting with the sports betting companies.

(08-16-2022 08:45 AM)johnbragg Wrote:  

(08-16-2022 08:30 AM)orangefan Wrote:  In the most recent quarter, Disney's Domestic Networks segment produced $2.075 billion in operating income on $5.700 billion in revenue. ESPN and its sister networks are a major portion of this.

Disney's corporate strategy is to build up operating income from streaming as operating income from linear networks decline. If it were to sell a significant part of its linear network portfolio it would receive a significant amount of cash that it could use to pay down debt, but it would take a huge hit to operating income.

Not what my dude is suggesting. He's suggesting a spinoff.

Quote:With respect to sports betting, it is not clear any company has achieved the scale to justify an investment as large as ESPN.

Might have the predator-prey relationship reversed there. It would be ESPN (possibly including ABC?) buying or contracting with the sports betting companies.

A spinoff would certainly be an interesting play. If they did, it would probably make sense to include ABC and its broadcasting assets. The spinoff, ABC+ESPN would resemble FOX after its sale of assets to Disney with a focus on sports, news and other live and reality content (14 of 22 hours in ABC's fall lineup is unscripted programming). Disney could retain FX, Freeform, Disney Channel and other channels featuring primarily scripted content.

Disney originally acquired ABC as an outlet for scripted television shows that it produced. ABC could continue to play this role on a contract basis and could continue to sell streaming rights to its programming to Hulu.

That said, Disney's cable networks all benefit from the leverage that ESPN brings in carriage negotiations with cable companies. Disney's cable networks, as well as Hulu, all benefit from the scale that ESPN brings in negotiations with advertisers. Both of these advantages could be diminished in a sale or spinoff.

Apple, Amazon, Paramount and Comcast all seem to believe that including sports content is a benefit in attracting streaming subscribers. It is possible that ABC+ESPN would be disadvantaged in the bidding for rights by being a standalone player rather than being part of an integrated Disney enterprise. On the other hand, ESPN+ may benefit from being exclusively a sports streaming service and could still bundle with Disney on a contractual basis.

(08-16-2022 08:45 AM)goodknightfl Wrote:  

(08-15-2022 02:10 PM)mufanatehc Wrote:  

(08-15-2022 12:56 PM)DavidSt Wrote:  Hulu could go back to showing free stuff since they have Disney +. CBS/Viacom now owns Pluto TV, and it is mainly free service, but CBS Access is is paid. Fox owns Tubi TV which is free.

Hulu has Disney's live streaming service, plus serves as an outlet for all of the Fox stuff they acquired like American Horror Story, Prey, It's Always Sunny, and the various R rated movies that don't really fit a Disney branded product. I don't think they can really merge it into Disney+ without backlash from parents groups and at least a moderate ding to the Disney brand's family friendly reputation.

Disney has already lost it's family friendly reputation. My kids grew up here in central Florida, we had planned to take a Disney trip as soon as youngest kid hit 6 years old, They have cancelled Disney+ on TV, and no longer want to take the kids there.

Silly question. do you consider the MCU and Star Wars Universe as family friendly? Because some might.

(08-16-2022 12:42 PM)jdgaucho Wrote:  

(08-16-2022 08:45 AM)goodknightfl Wrote:  

(08-15-2022 02:10 PM)mufanatehc Wrote:  

(08-15-2022 12:56 PM)DavidSt Wrote:  Hulu could go back to showing free stuff since they have Disney +. CBS/Viacom now owns Pluto TV, and it is mainly free service, but CBS Access is is paid. Fox owns Tubi TV which is free.

Hulu has Disney's live streaming service, plus serves as an outlet for all of the Fox stuff they acquired like American Horror Story, Prey, It's Always Sunny, and the various R rated movies that don't really fit a Disney branded product. I don't think they can really merge it into Disney+ without backlash from parents groups and at least a moderate ding to the Disney brand's family friendly reputation.

Disney has already lost it's family friendly reputation. My kids grew up here in central Florida, we had planned to take a Disney trip as soon as youngest kid hit 6 years old, They have cancelled Disney+ on TV, and no longer want to take the kids there.

Silly question. do you consider the MCU and Star Wars Universe as family friendly? Because some might.

Further to that point, the Disney Parks are absolutely crushing it revenue-wise and you can see it in the attendance. I *wish* there had been more people that chose not to go to Disney World when I visited there with my family last March - it would have cut down all of the wait times drastically. I know that there are some politically-based biases out there against Disney (the "go woke and go broke"-type nonsense), but any objective review of their financials would show that it's all bunk: they're the #1 movie company with the #1 tourist attraction with the #1 cable revenue generator (ESPN) with the #1 compilation of streaming subscribers. It's sort of like all of those claims that people stopped watching the NFL a couple of years ago, yet their viewership numbers are higher than ever and they're even MORE powerful today.

(08-16-2022 12:53 PM)Frank the Tank Wrote:  

(08-16-2022 12:42 PM)jdgaucho Wrote:  

(08-16-2022 08:45 AM)goodknightfl Wrote:  

(08-15-2022 02:10 PM)mufanatehc Wrote:  

(08-15-2022 12:56 PM)DavidSt Wrote:  Hulu could go back to showing free stuff since they have Disney +. CBS/Viacom now owns Pluto TV, and it is mainly free service, but CBS Access is is paid. Fox owns Tubi TV which is free.

Hulu has Disney's live streaming service, plus serves as an outlet for all of the Fox stuff they acquired like American Horror Story, Prey, It's Always Sunny, and the various R rated movies that don't really fit a Disney branded product. I don't think they can really merge it into Disney+ without backlash from parents groups and at least a moderate ding to the Disney brand's family friendly reputation.

Disney has already lost it's family friendly reputation. My kids grew up here in central Florida, we had planned to take a Disney trip as soon as youngest kid hit 6 years old, They have cancelled Disney+ on TV, and no longer want to take the kids there.

Silly question. do you consider the MCU and Star Wars Universe as family friendly? Because some might.

Further to that point, the Disney Parks are absolutely crushing it revenue-wise and you can see it in the attendance. I *wish* there had been more people that chose not to go to Disney World when I visited there with my family last March - it would have cut down all of the wait times drastically. I know that there are some politically-based biases out there against Disney (the "go woke and go broke"-type nonsense), but any objective review of their financials would show that it's all bunk: they're the #1 movie company with the #1 tourist attraction with the #1 cable revenue generator (ESPN) with the #1 compilation of streaming subscribers. It's sort of like all of those claims that people stopped watching the NFL a couple of years ago, yet their viewership numbers are higher than ever and they're even MORE powerful today.

My primary complaint about Disney World is that it is too crowded and it is putting the screws to its customers in so many ways to drive that higher park revenue. That said, many people are obviously willing to pay. It will be interesting to see if the level of interest fades after the post pandemic spike in travel recedes and/or if bad experiences with some of the new park policies cause customers to vacation elsewhere in the future.

(08-16-2022 08:45 AM)goodknightfl Wrote:  

(08-15-2022 02:10 PM)mufanatehc Wrote:  

(08-15-2022 12:56 PM)DavidSt Wrote:  Hulu could go back to showing free stuff since they have Disney +. CBS/Viacom now owns Pluto TV, and it is mainly free service, but CBS Access is is paid. Fox owns Tubi TV which is free.

Hulu has Disney's live streaming service, plus serves as an outlet for all of the Fox stuff they acquired like American Horror Story, Prey, It's Always Sunny, and the various R rated movies that don't really fit a Disney branded product. I don't think they can really merge it into Disney+ without backlash from parents groups and at least a moderate ding to the Disney brand's family friendly reputation.

Disney has already lost it's family friendly reputation. My kids grew up here in central Florida, we had planned to take a Disney trip as soon as youngest kid hit 6 years old, They have cancelled Disney+ on TV, and no longer want to take the kids there.

Why?

(08-16-2022 07:45 AM)curtis0620 Wrote:  Please sell Star Wars and Marvel, Disney has screwed it up enough.


Sent from my iPhone using Tapatalk

I'll give you Star Wars (even though I think The Mandalorian was great), but I think they've done an overall great job with Marvel.

It might not all be good but disney is popping out Marvel and Star War movies, shows at an impressive rate. Which didn't happen before

(08-16-2022 01:58 PM)topper1296 Wrote:  

(08-16-2022 07:45 AM)curtis0620 Wrote:  Please sell Star Wars and Marvel, Disney has screwed it up enough.


Sent from my iPhone using Tapatalk

I'll give you Star Wars (even though I think The Mandalorian was great), but I think they've done an overall great job with Marvel.

I'm more of a Star Wars fan compared to a Marvel fan (although really enjoy both), but Disney's stewardship of Marvel runs circles around how they've treated Star Wars. The fact that the MCU juggernaut was built without being able to use Spider-Man until the last phase of the series and no ability to use the X-Men or Fantastic Four at all is honestly one of the greatest achievements in entertainment history. This was the equivalent of the Big Ten being the most valuable conference as it is now, but stripping out all Ohio State, Michigan, Penn State, Michigan State and Wisconsin games and instead turning Illinois, Northwestern, Rutgers, Indiana and Purdue into legitimate mega-brands. That's essentially what Disney was able to do with Iron Man, Captain America, Thor, Black Panther and the Guardians of the Galaxy in turning the MCU into an entertainment industry monster.

As you've noted, The Mandalorian was great and Disney's Star Wars movies looked quite promising after The Force Awakens and Rogue One. The rest of their Star Wars movies were really subpar, though (and I am someone that is *highly* biased toward wanting/needing to like/love these movies).

One thing that really shocked me was that Disney legitimately didn't have any plan for how the story arc for Episodes VII through IX was going to go - they legitimately didn't know where the story was going to go until they started producing the next movie, and that showed with how Episode IX pretty much spent all of its time undoing everything that was stated in Episode VIII. This is totally different than the MCU where they intricately planned out over a decade's worth of movies and how they would all tie in together to culminate in Infinity War and End Game. As a Star Wars fan that thought that we'd get a coordinated story arc like the MCU, it has been so disappointing.