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Former Disney CEO Bob Chapek Breaks Silence, Says There’s No Strategic Need for ESPN Partners

Disney CEO Bob Chapek speaks during 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 that he saw no reason for Disney-owned ESPN to add minority partners.

“Strategically, I don’t really see any benefit in bringing on another minority partner in ESPN,” Chapek said as part of the CNBC documentary “ESPN’s Fight for Dominance,” which chronicles the network’s digital strategy. published Thursday.

Disney CEO Bob Iger told CNBC’s David Faber in July that he consider selling minority stake in ESPN strengthen the content or technology of the sports network to the extent that it plans a new direct-to-consumer offeringwhich it later announced would launch by fall 2025.

The company has not yet announced a deal to sell a stake in ESPN. CNBC reported in August, the network had held discussions with major U.S. professional sports leagues, including the National Football League and the National Basketball Association, about possible partnerships or investments.

Disney owns 80% of ESPN and Hearst the remaining 20%, a structure in place since 1996. In looking for a partner, Disney wants improve ESPN’s content, distribution and direct-to-consumer marketing, which has not yet been priced, Iger said at the Disney conference. August quarterly earnings call.

Securing a partnership with one of the professional sports leagues could help secure future live rights, although it could anger other media companies bidding against Disney for game packages. Bringing in a technology or telecommunications company such as Verizon or Apple could give ESPN broader distribution options by reaching a wider customer base.

Still, it’s not clear whether selling shares in ESPN is necessary to complete a deal. ESPN Chairman Jimmy Pitaro, who also spoke with CNBC as part of the documentary, downplayed the need for the sports network to sell a stake in his company in order to build a partnership with a league or other company .

“It’s not about fairness,” Pitaro said. “It’s not about these partners taking a stake in ESPN. That’s one thing, as Bob (Iger) said, that we’re very open to, but it’s about partnership and accelerating the launch or adoption of ESPN’s flagship product.”

Chapek’s first interview since his firing in 2022

Chapek’s remarks are his first public statements since Disney’s board fired him and brought Iger back as CEO about 16 months ago. He and Iger, who had remained executive chairman of Disney, had a strained relationship that gradually deteriorated during Chapek’s tenure as CEO, which lasted nearly three years from 2020 to 2022. as documented by CNBC in September. Chapek declined to comment on anything other than the future of ESPN for the CNBC documentary.

Although Chapek said he disagreed with the need to bring in a partner for strategic reasons, he acknowledged that Disney might do it to get money to pay for Disney’s stake. Comcast’s one-third stake in Hulu, which Disney has agreed to buy. at least $8.6 billion.

“There’s already a minority strategic partner in Hearst. So this would bring in a second minority strategic partner,” Chapek said. “Obviously the benefit of doing that is you free up money. And given some of the discussions that have been going on between Comcast and Disney about needing to buy the final share of Hulu to make it fully owned by Disney company, it’s possible that this money itself is what they’re after.”

ESPN Chairman James Pitaro during a New York Yankees baseball game at Yankee Stadium in New York on 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 platform to direct consumers to where a game is being broadcast, regardless of which company owns the broadcast rights – a CNBC concept first reported in March 2023.

“If I’m on my Apple TV and I want to watch a movie, I don’t know if it’s on Prime, Netflix, Disney+, Hulu or somewhere else,” Chapek said. “The way I find out is I go to Apple TV, I plug in the movie I’m looking to watch, and they direct me exactly to where that movie is. And then they connect me in a way seamless 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 one-stop navigation can help ESPN become the first place sports fans turn 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 move to a streaming world? I think solving that problem would be a great way to do that,” Chapek said.

WATCH: Bob Chapek discusses the future of ESPN

Former Disney CEO Bob Chapek on the future of ESPN

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