Disney is set to make ESPN into a standalone streaming service. The company acquired the sports channel in 2006 for more than $8 billion but is currently exploring the possibility of offering it solely to subscribers. CEO Bob Iger said Disney is seeking strategic partners, and rumors suggest NFL is a possible collaborator.
Analysts have urged caution and suggested that a full transition to a subscription service could be a disaster for Disney if customers are unwilling to pay a second bill for ESPN. Bob Iger appears to think the potential rewards are worth the risk. “Sports stands very tall in the media landscape for its ability to convene millions of people all at once,” he said.
The risk is perhaps even more significant if the performance of Disney’s current streaming services is considered. Disney+, for example, lost 4 million viewers in the second quarter of 2023 – increasing the pressure on the company amid a tumultuous period where share prices are down, movie intake is down, and the numbers attending theme parks have plummeted. In May, shares were down 8%, mainly due to a drop in streaming subscribers.
At the end of July, reports claimed that Disney’s theme parks in Florida and California were dealing with a significant decline in visitor numbers. Wait time for a ride in the parks was 47 minutes on average in 2019, but by this summer, that had dropped to 27 minutes.
The entertainment giant has also lost millions on movie projects in recent years, which some critics blame on its overtly political output. A 2023 animation, Elemental, for example, sought to reflect the immigrant experience, and other animations, intended for children have featured gay relationships and “non-binary” characters. Some parents have expressed frustration saying they want to take their kids out for fun and not to have adult discussions about what they see on screen.
Bob Iger, whose contract was renewed in July, has hinted he is also considering the sale of significant company assets.