Disney CEO Bob Iger was clear this week he has "no plans to get rid of ESPN," but leading the network “into the future won’t be easy,” according to Stephen Battaglio of the L.A. TIMES. The company “still must navigate the pressures of continued cord-cutting and escalating fees for the rights to air live sports.” ESPN also “will face greater accountability.” Now the network “will start reporting financial results as a free-standing unit” under newly established Chair Jimmy Pitaro. Previously, ESPN’s results had “disclosed as part of Disney’s larger television networks segment, eluding deep, detailed scrutiny.” ESPN’s “importance in the cable bundle” has “long been reflected in the high fees it is able to command from pay TV providers.” But with every customer who “cuts the cord, that revenue shrinks.” While the TV subscription dollars have diminished, ESPN has “faced pressure on the cost side.” Iger “has a special affinity for ESPN,” given that the CEO came up through ABC Sports, but Iger has also “long been clear-eyed” about the realities facing the future of the traditional TV business. The network “will be tested when it goes into rights renewal discussions with the NBA,” whose current deal expires after the 2024-25 season as Amazon and other tech companies are "expected to compete vigorously for the package” (L.A. TIMES, 2/9).
SPORTS STILL A PILLAR: The Ankler contributor Sean McNulty said Iger recognizes “how important sports is at the company and if you look at the future of broadcast, what is everybody saying: news and sports so maybe he’s planting a flag saying, ‘Sports is a pillar of the Disney company going forward.’” McNulty noted Iger stated the NBA is “very important” to ESPN and with the looming rights fee negotiations between ESPN and the NBA the league is “going to want to double their fees.” McNulty: “But the NBA also doesn’t want to go to streaming directly. They need that wide audience of an ABC and of the still potent cable networks at ESPN for viewership" (“Power Lunch,” CNBC, 2/9).
