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Analyst Theorizes Disney May Drop ESPN Amid Low Stock Worries

Photo from Disneyplus.com

Analyst Theorizes Disney May Drop ESPN Amid Low Stock Worries

By Movieguide® Staff

It looks like Bob Iger has some big changes in mind to boost Disney’s profits in the coming year. 

Last week, Disney stock traded at 86.14, a 45% drop from this time last year. 

Wells Fargo analyst Steven Cahall has theorized that Iger might boost the stock points by dropping some of the companies they’re merged with — specifically, ESPN. 

“ESPN, traditionally the cash cow, is neither owned-IP nor global the way the rest of Disney is,” he explained. “With linear and sports trends diverging from core IP, we think severing the company is increasingly logical.”

Separating ESPN and ABC “would leave remaining Disney as an attractive pureplay IP company,” Cahall explained. 

He also gave us a look at what dropping ESPN might mean for consumers. 

Firstly, ESPN would likely launch their own “a la carte” streaming service, independent of Disney+ and Hulu. Secondly, Disney would then need to think about ways to make up the money they would lose by getting rid of ESPN. Cahall theorized this might mean selling Hulu, too. 

While it seems like dropping ESPN would just add to Disney’s financial headache, Cahall explained that this would be attractive to investors. 

“Disney can move forward with an IP strategy, while ESPN can determine how best to price and monetize sports, which is increasingly tricky,” he said. “Investors can build their own portfolios, and we think ESPN inside of Disney is a portfolio with less and less logical connection as time goes by. As such, to us, it’s a reasonably probable event for late 2023. We like Disney for its optionality and self-help.”

Movieguide® previously reported on Iger’s return to Disney and what that might mean for the company:

Former CEO of The Walt Disney Company Bob Iger will return to the company after Bob Chapek’s short tenure as CEO comes to a swift end.

The change comes after abysmal fourth-quarter earnings for the company.

“We thank Bob Chapek for his service to Disney over his long career, including navigating the company through the unprecedented challenges of the pandemic,” Susan Arnold, Chairman of the Board for Disney, said in a statement according to CNN. “The Board has concluded that as Disney embarks on an increasingly complex period of industry transformation, Bob Iger is uniquely situated to lead the Company through this pivotal period.”

Chapek became CEO in 2020. According to investors, stock value for the Disney dropped by an astounding 36% this year alone.

Under Chapek, Disney navigated COVID-19, a lawsuit with actress Scarlett Johansonn, and most recently, a promotion of LGBTQ characters and movies following Florida’s “Parental Rights in Education” bill and backlash over his initial silence.

“Speaking to you, reading your messages, and meeting with you have helped me better understand how painful our silence was,” Chapek said at the time in regards to the response to the LGBTQ employees.

With Iger’s return, Disney shares rose by 9% according to investors.

“I am extremely optimistic for the future of this great company and thrilled to be asked by the Board to return as its CEO,” Iger said. “Disney and its incomparable brands and franchises hold a special place in the hearts of so many people around the globe — most especially in the hearts of our employees, whose dedication to this company and its mission is an inspiration.”

Iger added: “[I am] deeply honored to be asked to again lead this remarkable team, with a clear mission focused on creative excellence to inspire generations through unrivaled, bold storytelling.”

Iger should focus his efforts on returning to the uplifting and family-friendly stories that made the company a movie mogul, with iconic instillations like TOY STORY, THE LION KING, FINDING NEMO and more.

Recently, under Chapek, Disney opted to for “bold storytelling” that focussed on sex rather than story and character.

Recent examples include Pixar’s recent box office disappointment LIGHTYEAR and episodes from the newest season of BAYMAX.

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Our small team works tirelessly to provide resources to protect families from harmful media, reviewing 415 movies/shows and writing 3,626 uplifting articles this year. We believe that the gospel can transform entertainment. That’s why we emphasize positive and faith-filled articles and entertainment news, and release hundreds of Christian movie reviews to the public, for free. No paywalls, just trusted, biblically sound content to bless you and your family. Online, Movieguide is the closest thing to a biblical entertainment expert at your fingertips. As a reader-funded operation, we welcome any and all contributions – so if you can, please give something. It won’t take more than 52 seconds (we timed it for you). Thank you.

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4000+ Faith Based Articles and Movie Reviews – Will you Support Us?

Our small team works tirelessly to provide resources to protect families from harmful media, reviewing 415 movies/shows and writing 3,626 uplifting articles this year. We believe that the gospel can transform entertainment. That’s why we emphasize positive and faith-filled articles and entertainment news, and release hundreds of Christian movie reviews to the public, for free. No paywalls, just trusted, biblically sound content to bless you and your family. Online, Movieguide is the closest thing to a biblical entertainment expert at your fingertips. As a reader-funded operation, we welcome any and all contributions – so if you can, please give something. It won’t take more than 52 seconds (we timed it for you). Thank you.