Disney has decided to keep ESPN
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- ESPN used to be one of the most important assets in media.
- That's changed, because the media world has changed, and Disney has debated spinning out ESPN as a stand-alone company.
- But new CEO Josh D'Amaro has decided to keep ESPN in-house, for now.
Disney has decided against spinning off ESPN, people familiar with the matter told Business Insider, in one of the first major calls of new CEO Josh D'Amaro's tenure.
The question of whether Disney would turn ESPN into a stand-alone company has hung over the company for years, as some investors and analysts argued that the declining cable business was a drag on the larger company's value.
Instead, the sports network will stay inside the media giant, which thinks its presence will help its pivot to streaming, the people said.
Disney is facing a probe by the Federal Communications Commission into its ABC broadcast licenses, a review that was announced a day after President Donald Trump called on the company to fire comedian Jimmy Kimmel.
D'Amaro could revisit his decision on ESPN in the future, people inside the company noted. But at the moment, it's a non-discussion, I'm told.
That means Disney will continue with efforts to offer ESPN to customers in multiple ways: as part of its traditional cable bundle, as part of a streaming bundle with Hulu and Disney+, and as a streaming service, And it may also look for other partners to take minority interests in the company, like it did when it sold a 10% stake in the company to the NFL last year.
Disney executives, including former CEO Bob Iger, have repeatedly described ESPN as a "core" asset, but have also never fully closed the door to a sale. I've asked Disney for comment; an ESPN rep declined to comment.
The fact that Disney has previously discussed whether ESPN should remain inside the company shows you just how much the media landscape has changed in the last decade.
For years, ESPN was a profit-making colossus that could charge cable distributors just about anything it wanted, and spent freely to lock up sports rights. But in 2015, Iger shocked the media industry by acknowledging that ESPN was losing subscribers because of cord-cutting, and since then, there's been a debate in and outside the company about the best way to use a big but declining asset.