Disney CEO Bob Chapek speaks at the 2022 Disney Legends Awards during Disney’s D23 Expo in Anaheim, California on September 9, 2022.
Mario Anzuoni | Reuters
In his first public comments since Disney fired him as CEO in November 2022, Bob Chapek told CNBC he sees no reason why Disney-owned ESPN needs to add minority partners.
“From a strategic standpoint, I don’t see any benefit to bringing another minority partner into ESPN,” Chapek said in the CNBC documentary “ESPN’s Fight for Dominance,” which chronicles the network’s digital strategy, released Thursday.
Disney CEO Bob Iger told CNBC’s David Faber in July that he would consider selling a minority stake in ESPN to bolster the sports network’s content or technology as he plans a new direct-to-consumer offering, which he later said it would be launched by autumn 2025.
The company has not yet announced a deal to sell a stake in ESPN. CNBC reported in August that the network had held talks with major American professional sports leagues, including the National Football League and National Basketball Association, about potential partnerships or investments.
Disney owns 80% of ESPN and Hearst owns the remaining 20%, a structure that has existed since 1996. Looking for a partner, Disney wants improve ESPN’s direct-to-consumer content, distribution and marketing, which has not yet been priced, Iger said during Disney’s August quarterly earnings call.
Forging a partnership with one of the professional sports leagues could help secure future live rights, although it could irk other media companies bidding against Disney for game packages. Bringing in a technology or telecommunications company like Verizon or Apple could give ESPN broader distribution options while reaching larger customer bases.
However, it is not clear that selling shares in ESPN is necessary to reach a deal. ESPN President Jimmy Pitaro, who also spoke to CNBC as part of the documentary, downplayed the need for the sports network to sell a stake in its business to build a partnership with a league or other company.
“It’s not a question of fairness,” Pitaro said. “It’s not about these partners taking an ownership stake in ESPN. That’s something, like Bob [Iger] he said we’re very open, but it’s about partnerships and accelerating the launch or adoption of the ESPN flagship.”
Chapek’s first interview since his dismissal in 2022
Chapek’s remarks are his first public statements since Disney’s board fired him and brought back Iger as CEO about 16 months ago. He and Iger, who remained Disney’s executive chairman, had a strained relationship that got progressively worse during Chapek’s tenure as CEO, which lasted nearly three years from 2020 to 2022, as CNBC documented in September. Chapek declined to comment on anything other than ESPN’s future for the CNBC documentary.
While Chapek said he disagreed with the need to take on a partner for strategic reasons, he acknowledged that Disney might do so to bring in cash to pay for Comcast’s one-third stake in Hulu, which Disney has pledged to purchase for at least $8.6 billion.
“There’s already a minority strategic partner at Hearst. So this would mean bringing in a second minority strategic partner,” Chapek said. “Obviously, the benefit of doing that is that it frees up some money. And given some of the conversations that have taken place between Comcast and Disney in terms of needing to purchase the final stake in Hulu to make it wholly owned by the Disney company, it’s possible that maybe that money is what they’re looking for.”
ESPN President James Pitaro during a New York Yankees baseball game at Yankee Stadium in New York City, June 19, 2019.
The Washington Post | The Washington Post | Getty Images
Hub for all sports
Chapek also discussed the vision he had as CEO to transform ESPN into a centralized hub to direct consumers to where a game is streamed, regardless of which company owns the rights to broadcast it — a concept first reported by CNBC in March 2023.
“If I’m on my Apple TV and I want to watch a movie, I have no idea whether it’s on Prime or Netflix or Disney+ or Hulu or wherever it is,” Chapek said. “The way I find out is I go to Apple TV, connect the movie I want to watch, and they direct me exactly where that movie is. And then they connect me seamlessly without me having to leave and go to another app to find the show on that app. I think ESPN should be that source for a central clearinghouse.”
Adding unique navigation can help ESPN become the first place sports fans go when they want to watch a game, even if Disney doesn’t own the rights to certain sports, Chapek said.
“How can you make yourself indispensable to sports viewers so that they stick with you as you evolve into the world of streaming? I think solving this problem would be a great way to do that,” Chapek said.
WATCH: Bob Chapek talks ESPN’s future
