SBD/July 9, 2014/Finance
Games Without Frontiers: ESPN Provides More Than 50% Of Disney's Operating Profit
Many people talk about ESPN being the "crown jewel in the Disney empire," and its financials "speak to that," according to Jon Erlichman of Bloomberg TV. When observers "look at the cable network's business for Disney, which is largely fueled by ESPN," it is "about a third of the company's overall revenue." But it is more than 50% of the "operating profit." So "a lot of the company's profitability power indeed comes from ESPN," through advertising and "what they're able to charge" the cable and satellite operators. Erlichman: "They win when the ratings are great because they're able to satisfy the advertisers … and they're able to say to the cable companies who sometimes wonder about these high fees that they're paying for sports channels to say, 'Listen, this is what people want to watch.'" Erlichman said ESPN President John Skipper's name "doesn't come up all the time" in terms of being a possible successor to Disney Chair & CEO Bob Iger, but "certainly there are a lot of reasons for Skipper's name to come up because of the power that ESPN has and because of his general way, which is a pretty casual, charming approach" ("In The Loop," Bloomberg TV, 7/7).
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