Ex-Disney CEO Bob Chapek says ESPN doesn’t need strategic partners

In his first public feedback since Disney fired him as CEO in November 2022, Bob Chapek advised CNBC he sees no motive for Disney-owned ESPN so as to add minority companions.

“Strategically, I do not actually see a profit in bringing on one more minority companion into ESPN,” Chapek stated as a part of the CNBC documentary “ESPN’s Combat for Dominance,” which chronicles the community’s digital technique, revealed Thursday.

Disney CEO Bob Iger advised CNBC’s David Faber in July that he’d contemplate promoting a minority stake in ESPN to strengthen the sports activities community’s content material or know-how because it plans a brand new direct-to-consumer providing, which he later stated would launch by fall 2025.

The corporate hasn’t but introduced a deal to promote a stake in ESPN. CNBC reported in August that the community had held talks with the main American skilled sports activities leagues, together with the Nationwide Soccer League and the Nationwide Basketball Affiliation, about potential partnerships or investments.

Disney owns 80% of ESPN and Hearst owns the opposite 20%, a construction that is been in place since 1996. By looking for a companion, Disney desires to reinforce the content material, distribution and advertising and marketing of the direct-to-consumer ESPN, which hasn’t but been priced, Iger stated throughout Disney’s August quarterly earnings name.

Hanging a partnership with one of many skilled sports activities leagues may assist safe future dwell rights, although it could irritate different media firms that bid towards Disney for packages of video games. Bringing on a know-how or telecommunications firm akin to Verizon or Apple may give ESPN broader distribution choices by reaching bigger buyer bases.

Nonetheless, it is unclear promoting fairness in ESPN is required to strike an association. ESPN President Jimmy Pitaro, who additionally spoke with CNBC as a part of the documentary, downplayed the necessity for the sports activities community to promote a stake in its enterprise to construct a partnership with a league or one other firm.

“It isn’t about fairness,” Pitaro stated. “It isn’t about these companions taking an possession curiosity in ESPN. That’s one thing, as Bob [Iger] has stated, that we’re very a lot open to, however that is about partnership and accelerating the launch or the adoption of ESPN flagship.”

Chapek’s remarks are his first public statements since Disney’s board fired him and introduced again Iger as CEO about 16 months in the past. He and Iger, who had stayed on as Disney’s government chairman, had a strained relationship that received progressively worse by Chapek’s tenure as CEO, which ran almost three years from 2020 to 2022, as documented by CNBC in September. Chapek declined to touch upon something apart from ESPN’s future for the CNBC documentary.

Whereas Chapek stated he did not agree with the necessity to convey on a companion for strategic causes, he did acknowledge Disney would possibly do it to herald money to pay for Comcast’s one-third stake in Hulu, which Disney has dedicated to purchase for at the least $8.6 billion.

“There’s already one minority strategic companion in Hearst. So this could be bringing on a second minority strategic companion,” Chapek stated. “Clearly, the advantage of doing that’s that you simply make obtainable some money. And given a number of the dialog that is been occurring between Comcast and Disney when it comes to needing to purchase the ultimate share of Hulu to make it wholly owned by the Disney firm, it is doable that possibly that money itself is what they’re after.”

Chapek additionally mentioned the imaginative and prescient he had as CEO of turning ESPN right into a centralized hub to direct shoppers to the place a sport is streaming, irrespective of which firm owns the rights to air it — an idea CNBC first reported in March 2023.

“If I am on my Apple TV and I wish to watch a film, I do not know whether or not it is on Prime or Netflix or Disney+ or Hulu or wherever it is at,” Chapek stated. “The best way I discover out is I am going to Apple TV, I plug within the film that I am seeking to watch, and so they direct me precisely to the place that film is. After which they join me seamlessly with out me then having to exit and go to a different app to go discover the present on that app. I believe ESPN must be that supply for a central clearinghouse.”

Including one-stop navigation may also help ESPN change into the primary place sports activities followers go to after they wish to watch a sport, even when Disney would not personal the rights to sure sports activities, Chapek stated.

“How do you make your self indispensable to the sports activities viewer in order that they keep on with you as you evolve over to a streaming world? I believe fixing that downside could be one huge approach to do it,” Chapek stated.

WATCH: Bob Chapek discusses ESPN’s future