New York
CNN business
—
After all, Dan Loeb has no problem with Disney keeping ESPN.
The activist investor and Third Point CEO who made headlines last month when the media giant proposed spinning off ESPN had a change of heart over the weekend.
“We better understand the potential of ESPN as an independent business and $DIS as another vertical to reach global audiences and generate advertising and subscriber revenue.” Loeb tweeted on Sunday.
Third Point added that it looks forward to seeing ESPN President James Pitaro “execute its plans for growth and innovation, creating significant synergies as part of The Walt Disney Company.”
For years, ESPN was widely considered the crown jewel of Disney’s media empire, but with cord cutting and a streaming revolution happening across the entertainment industry, the network has lost some of its luster. Sports, especially the NFL, remain the most popular shows on television, so the network’s advertising revenue remains a valuable part of Disney’s portfolio.
Third Point bought a new stake in Disney last month, saying at the time that “Disney’s complex transformation has been successful,” and that the investment firm is “confident in Disney’s current trajectory.”
But Loeb also said he would like to see five changes at Disney, which he said would “unlock even more value in the near future.”
One of the most high-profile changes is Disney’s demise of ESPN. To reduce Disney’s debt, Loeb said, “we can make a strong case that the ESPN business should be spun off to appropriately indebted shareholders.”
“ESPN will have more flexibility to pursue business initiatives that may be more challenging as part of Disney, such as sports betting,” Loeb added. We are better served by a centralized team that provides delivery leadership.”
Disney CEO Bob Chapek praised the cable sports network on Saturday, telling Variety that “ESPN’s ad demand speaks volumes.”
“But what also says a lot is that when rumors were circulating that Disney might spin off ESPN, there were over 100 inquiries wanting to buy it. “What does that tell you? I mean, we got some really good stuff.”
– Paul R. La Monica of CNN Business contributed to this report.
