Disney CEO Bob Iger sent shockwaves through the entertainment industry and Wall Street with his recent declaration that linear television may no longer be a core focus for the company. In a CNBC interview at Sun Valley, Iger expressed his interest in finding partners for ESPN as Disney shifts its focus to streaming. However, he assured that Disney’s commitment to filmed entertainment, television content studios, and theme parks remains unwavering. The future of Disney, however, may look very different once Iger’s contract ends in 2026, assuming a successor is found by then. Iger recently extended his contract, citing the need for significant transformation within the company.
During a conference call discussing quarterly earnings, Iger acknowledged that linear television, including ABC, FX, Freeform, and National Geographic, continues to be highly profitable for Disney. However, he also recognized the undeniable impact of cord cutting on the industry. He stated, “We are thinking expansively and considering a variety of strategic options.” Despite these challenges, Disney is fortunate to have a range of highly productive television studios that will continue to provide exceptional content for audiences in the future.
In terms of ESPN, Iger revealed that Disney has received significant interest from various entities after seeking strategic partners. He has also hired former top executives as consultants to assist with this process. Disney intends to retain control of ESPN and is open to partnerships in content, technology, marketing, and distribution. Iger emphasized the importance of increasing ESPN’s content offerings and obtaining distribution and marketing support. Ultimately, Disney aims to transition ESPN into a direct-to-consumer business.
Looking ahead, Iger acknowledged the need for a substantial amount of content to ensure the success of Disney’s direct-to-consumer business. This consideration will also impact the pricing model and distribution support required. As Disney moves towards a streaming-focused business, Iger believes that adding more content under favorable circumstances would be a wise decision.
While the old business model benefited from distribution support from cable and satellite providers, the shift to direct-to-consumer means Disney will need to navigate this landscape independently. However, Iger remains open to the possibility of partnering with another entity to assist in this regard. He expressed enthusiasm for the level of interest Disney has received and the potential opportunities that lie ahead.
