Business

Disney boss turns down Dan Loeb’s call to shoot ESPN

Bob Chapek, the chief executive of Walt Disney, has rejected calls from activist investor Dan Loeb to sell or cut off the sports TV network ESPN, vowing to restore the business to its state. was once the growth engine of the company.

LoebThe fund’s hedge fund Third Point revealed in August that it had purchased a $1 billion stake in the company, calling for a split of ESPN to reduce Disney’s debt load – just one element in a plan. extensive plan to shake up the media company.

In an interview with the FT, Chapek said Disney was “deceived” by the interest of companies looking to acquire ESPN earlier this year amid rumors that the company was considering a sale. cable network.

“If people want to buy in. . . I think that says something about its potential,” Chapek said. “I think its potential lies within the Disney company.”

ESPN broadcasts live sports in the US, including National Football League, National Basketball Association and Major League Baseball games.

“We have a plan to restore ESPN to its growth trajectory,” Chapek said. “When the rest of the world knows what our plan is, they will be as confident about it as we are.”

Bob Chapek speaks at the 2022 Disney Legends Awards during Disney’s Expo D23 on Saturday © REUTERS

Chapek said he has “regular conversations” with Loeb, who also bought a stake in Disney in 2020 that he sold earlier this year. He described the conversations as “very collaborative, non-adversarial and collective,” including around Loeb’s recommendations to change the composition of Disney’s board.

He defended the board, saying the average tenure is four years and has a “skill range”.

But he added: “We’re very consistent with Dan’s thinking that everything he talks about is something we’ve considered in the past or are looking at for the future.”

Loeb has also called on Disney to buy Comcast’s 33% stake in streaming service Hulu by January 2024, when Disney has the option to buy the rest. Some Wall Street analysts are also calling for Disney to settle its ownership of Hulu soon.

Chapek said he would “want” to get the matter resolved sooner, but Comcast seemed reluctant.

“We’ve talked to them many times over the past year,” he said. “If that’s in the cards, we’d love to do it, but to tango it takes two.” He noted that market sentiment has changed significantly since the deal was signed, as investors are more optimistic about streaming.

Chapek was speaking on the sidelines of the annual D23 convention in Anaheim, California, where the company revealed its streaming and theater media to thousands of Disney fans. Disney has released trailers for two highly-anticipated movies this fall, the sequel to Black Panther Wakanda Forever and Avatar: The Road of Water.

It also previewed a bunch of original series on Disney Plus, including a Star Wars prequel Andor and the Marvel series Secret Invasion.

Chapek said the new vehicle represents the end of production bottlenecks caused by Covid. “This is our new steady state (in terms of production), and says that both the pace of production and the size of its content budget – currently around $30 billion – will remain flat,” he said. stability.

Disney has continued to add new customers to its streaming services this year, and by some measures its overall streaming has surpassed Netflix of registrants. But Netflix’s revelation that it has lost more than 1 million subscribers this year has hit the entire streaming business, with investors growing increasingly concerned about high content spending and demands. Ask for a clear path to profit.

Analysts say Disney’s theme park business is also recovering strongly despite the closure of parks in China. But the stock is down 26.5% this year, compared with the S&P 500’s 15.2% drop.

Chapek said Disney has “enviable commercial momentum” both in its content and theme park businesses, but is suffering from investor “uncertainty” over streaming. due to Netflix problems.

“For a long time, we benefited from being like Netflix because we were a streaming company,” he said. “No wonder we were painted with the same brush [but] We are not the same company. “

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