Former Disney CEO, Bob Chapek, recently addressed the situation regarding ESPN’s potential addition of minority partners. In his first public comments since being fired as CEO in November 2022, Chapek stated that he sees no strategic need for ESPN to bring on another minority partner. These comments were made during an interview for CNBC’s documentary “ESPN’s Fight for Dominance,” which focuses on the network’s digital strategy.
Chapek’s statement comes in response to Disney CEO Bob Iger’s previous comments about considering selling a minority stake in ESPN to strengthen the sports network’s content or technology. However, Chapek believes that there is no clear benefit to adding another minority partner to ESPN. Currently, Disney owns 80% of ESPN, while Hearst owns the remaining 20%. This ownership structure has been in place since 1996.
While Disney has been in talks with major American professional sports leagues, including the NFL and NBA, about potential partnerships or investments, they have not yet announced a deal to sell a stake in ESPN. The goal of seeking a partner for ESPN is to enhance the content, distribution, and marketing of the network’s upcoming direct-to-consumer offering, which is set to launch by fall 2025. By partnering with a professional sports league or a technology/telecommunications company like Verizon or Apple, ESPN could secure future live rights and expand its distribution options.
However, Chapek believes that selling equity in ESPN may not be necessary to achieve these goals. ESPN President Jimmy Pitaro also downplayed the need for a stake sale, emphasizing that it is more about partnership and accelerating the launch of ESPN flagship. While Chapek did acknowledge that bringing on a partner could provide cash to pay for Comcast’s stake in Hulu, which Disney is committed to buying for at least $8.6 billion, he questioned whether this was the primary motive behind seeking a partner for ESPN.
Chapek also discussed his vision for ESPN as a centralized hub that directs consumers to where a game is streaming, regardless of the company that owns the rights to air it. He compared this concept to how Apple TV helps users find movies across different streaming platforms. Chapek believes that ESPN should serve as a central clearinghouse for sports content, making it easier for viewers to find and watch their favorite games, even if Disney doesn’t own the rights to certain sports. This would help ESPN become indispensable to sports viewers and maintain its relevance in the streaming world.
Overall, Chapek’s comments shed light on the ongoing discussions surrounding ESPN’s future and potential partnerships. While there is no immediate need for a minority partner according to Chapek, the possibility of a stake sale remains open as Disney continues to explore options to enhance the content and distribution of ESPN. Additionally, Chapek’s vision for ESPN as a central hub for sports streaming highlights the network’s ambition to stay relevant and provide a seamless viewing experience for sports fans in an increasingly digital world.
