Lets throw this into the mix
"We see it as a reasonably probable late-'23 event," writes Wells Fargo's Steven Cahall.
www.hollywoodreporter.com
The “spin off ESPN” idea has gone around among Wall Street types for over a year, as Disney’s political missteps and grossly unprofitable streaming venture (what is it again that is the inevitable secret that will automatically happen to make streaming profitable) drag down the stock.
Self appointed “analysts” who tell the people actually running big companies what to do are a common Wall Street sighting. There is a reason one guy is running the company and the other is more or less the stock market version of a tout.
Anyway, both ABC and ESPN have problems in the long term.
ABC, like all TV station groups, have gotten fat from retransmission consent. TRUE cord cutters, as opposed to the vast majority who are just cord switchers, don’t have linear TV and don’t pay retransmission costs. Network TV, leaving out sports, and for some people, local news (and most local news is available free on the internet), is just filler. ABC currently has eight hours of actual filmed scripted shows. None of which are any good. The rest is sports, game shows, faux reality, cooking, and news commentary. Daytime TV, well, let’s just say, is low effort politics. Network news has never actually made money, and while people get all worked up about late night ratings, the actual highest rated late night event is sleeping, its three bad comics fighting over a handful of people.
ESPN is a much larger problem. It remains, unlike streaming, obscenely profitable. But the business model is flawed. In the bundle, “everybody” paid, and paid a LOT for ESPN (and its imitators) whether they liked sports or not. Most people do not like sports. The TRUE cord cutters are mostly price driven, and the price in turn is driven by sports. There have always been many homes that would opt out of sports if they could, and now they can.
So just sell ESPN a la carte. Not so fast sparky. That business model just doesn’t work. First, selling it a la carte voids every cable and other providers contract. And why would ANYONE pay for the bundle if you could really do what the cord switchers claim they can do, which is only pay for what they want? So selling it a la carte means the end of the cable bundle system. And then end of that sweet, $8/month from little old ladies who only watch Game Show Network and Hallmark movies. They have done the math, and a la carte ESPN needs $50/month to break even. Add in Fox Sports, the RSN, and then the streamers that carry sports along with the reruns and melodramas (Amazon, Apple, Peacock, etc) and you are looking at $120-150 month, just for sports. Remember all those “I never watch ______ why do I have to pay for it” posts. Be careful what you wish for, you just might get it.
So, these “analysts” want Disney to slough off what conventional wisdom says will be toxic assets in maybe a decade or so.
Which leaves Disney with some aging amusement parks, a library full of reruns, not just its own but Fox’s for which it paid way too much, and a movie studio that seems only able to make endless remakes of comic book movies.
And Disney streaming, which is gushing money like a stuck pig.
www.mediaplaynews.com
