5.6 C
New York

Loeb reverses course on push to get Disney to spin off ESPN


Dan Loeb

Justin Solomon | CNBC

Activist investor Dan Loeb indicated that he will retreat from his push to get Disney to spin off ESPN, reversing a position he had pushed lower than a month ago.

In a tweet Sunday morning, the Third Point CEO said he sees the virtue of keeping the sports network as a separate vertical inside Disney’s conglomerate.

“We’ve got a greater understanding of @espn’s potential as a standalone business and one other vertical for $DIS to achieve a worldwide audience to generate ad and subscriber revenues,” Loeb said.

“We sit up for seeing Mr. Pitaro execute on the expansion and innovation plans, generating considerable synergies as a part of The Walt Disney Company,” he added, referencing Disney Chairman James Pitaro.

The tweet follows comments from Disney CEO Bob Chapek, who told journalists at this weekend’s D23 Expo that he has big plans for ESPN, though he didn’t disclose details. Chapek told Variety that “we had a minimum of 100 inquiries of people who desired to buy” ESPN when word hit that it was potentially up on the market.

“What does that inform you? That claims we have something really good,” he said. “And if you could have a strategic plan, a vision for where it suits into the corporate over the following 100 years, you then don’t exactly wish to divest yourself of it. And we have now that plan. We have not shared that plan.”

The reversal in Loeb’s position comes after he took a latest stake in Disney within the second quarter valued at about $1 billion, or 0.4% of the corporate. Disney’s shares have rallied about 6.5% over the past month. Loeb had moved out of an earlier position in the corporate when shares fell as rates of interest surged.

At the center of his push to spin off ESPN was a belief that the brand new business could expand into areas including sports betting. He compared it to the eBay spinoff of PayPal “while continuing to utilize the product to process payments.”

Together with the ESPN issue, Loeb urged Disney to bring streaming giant Hulu directly onto the Disney+ direct-to-consumer platform. NBC Universal parent Comcast has an agreement to sell its 33% Hulu stake to Disney in two years. Loeb advisable that Disney “make every attempt” to amass the remaining minority stake before the sale deadline.

“We consider that it could even be prudent for Disney to pay a modest premium to speed up the mixing,” Loeb said in a letter. “We all know this can be a priority for you and hope there’s a deal available before Comcast is contractually obligated to accomplish that in about 18 months.”

CNBC has reached out to Disney for comment.

Disclosure: CNBC is a component of Comcast’s NBCUniversal.

Get the latest Sports Updates (Soccer, NBA, NFL, Hockey, Racing, etc.) and Breaking News From the United States, United Kingdom, and all around the world.

Related articles


Recent articles