Bob Chapek, CEO of Disney, speaks at the 2022 Disney Legends Awards during Disney’s D23 show in Anaheim, California, 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 for Disney-owned ESPN to add minority partners.
“Strategically, I don’t really see the benefit of 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, 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 would be launched until autumn 2025.
The company has yet to announce a deal to sell a stake in ESPN. CNBC reported in August that the network was in talks with major American 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 owns the remaining 20%, a structure that has been in place since 1996. Looking for a partner, Disney wants to improve ESPN’s content, distribution and direct-to-consumer marketing, which has yet to be priced, Iger said during Disney’s August Quarterly Earnings Call.
A partnership with one of the professional sports leagues could help secure future live rights, though it could upset other media companies bidding against Disney for game packages. The presence of a technology or telecommunications company such as Verizon or Apple could give ESPN broader distribution options by reaching larger customer bases.
However, it is unclear whether the sale of shares in ESPN is required 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 form a partnership with a league or other company.
“It’s not about equity,” Pitaro said. “It’s not about these partners who have an ownership interest in ESPN. That’s something, like Bob [Iger] said, that we’re very open, but this is about partnering 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 reinstated Iger as CEO about 16 months ago. He and Iger, who had stayed on as Disney’s executive chairman, had a strained relationship that gradually worsened during Chapek’s tenure as CEO, which spanned nearly three years from 2020 to 2022. as documented by CNBC 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 attract a partner for strategic reasons, he acknowledged that Disney may do so to bring in cash to pay for Comcast’s one-third stake in Hulu, which Disney has committed to to buy for at least $8.6 billion.
“There is already a strategic minority partner in Hearst. So this would mean a second strategic minority partner,” Chapek said. “Obviously, the benefit of that is that you have some cash. And given some of the discussions that are going on between Comcast and Disney regarding the need to buy the ultimate stake in Hulu to become wholly owned by the Disney company, it’s possible that the cash itself seeks.’
ESPN president James Pitaro at a New York Yankees baseball game at Yankee Stadium in New York, 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 turn ESPN into a central hub to direct consumers to where a game is being broadcast, regardless of which company owns the broadcast rights — an idea CNBC first reported in March 2023.
“If I’m on my Apple TV and I want to watch a movie, I have no idea if it’s on Prime or Netflix or Disney+ or Hulu or wherever,” Chapek said. “The way I find out is I go to the Apple TV, plug in the movie I’m looking to watch, and they direct me right to where that movie is. And then they plug me in seamlessly without having to go out and go to another app to find it show on this app. I think ESPN should be that source for a central clearinghouse.”
Adding a navigation stop can help ESPN become the first place sports fans go when they want to watch a game, even if Disney doesn’t have the rights to some sports, Chapek said.
“How do you make yourself relevant to sports viewers so they stick with you as you evolve into a streaming world? I think solving that problem would be a big way to do that,” Chapek said.
WATCH: Bob Chapek discusses the future of ESPN