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Investor Calls for Disney To Spin Off ESPN

Activist investor Dan Loeb has bought a “significant stake” in Walt Disney, and is calling on the media giant to make some drastic changes.

Loeb sent a letter to CEO Bob Chapek asking Disney to consider buying up the remainder of Hulu, making changes to the board, and spinning off sports juggernaut ESPN.

When Disney took majority control of Hulu in 2019, it was written into the deal that one-third owner NBCUniversal could require Disney to buy it out by 2024, for “at least A$12.8 billion (US$9 billion). Leob feels Disney should “make every attempt” to close this deal, suggesting “it would even be prudent for Disney to pay a modest premium to accelerate the integration.”

Disney and NBCUniversal parent company Comcast disagree over the value of Hulu – with Comcast believing the streaming service worth close to A$1 billion.

More shockingly, Loeb states a “strong case to be made” that Disney should spin off its ESPN business to shareholders to alleviate leverage at the parent company.

Loeb believes a similar broadcasting situation regarding ESPN could be met through contractual arrangements, while ridding Disney of a business “haunted by the specter of cord-cutting,” regarding to the practice of subscribers fleeing the service in favour of online options.

ESPN lost two million US subscribers in 2016, seeing numbers fall to the lowest count since 2005. This migration to streaming services was behind Disney’s focus on Disney+, which it launched in 2019.

Disney+ currently has 152.1 million subscribers, while ESPN+ has 22.8 million, and Hulu has 46.2 million.


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