News The Walt Disney Company Board of Directors Extends Robert A. Iger’s Contract as CEO Through 2026

[Sirwalterraleigh]

Why? Because people don't like sports anymore?

No…they’re not tied to linear cable with limited live action coverage that ESPN was designed around

Their DTC foray hasn’t gained a lot of traction…which is why Cable Bob is trying to bundle it/force it on the unwilling

 

[Robbiem]

And that’s a big part of the management story for Disney for 30 years

Everyone thought Eisner was nuts buying Capitol cities…but the ESPN buy worked beyond his wildest dreams 95-2010

Since…Iger reaped profits as they crescendoed…but obviously didn’t know how to navigate the fall.

I don’t blame him…If he didn’t know, literally no one could have

But their tentative move to stream was twofold:
1. They wanted to suck every penny out of old costs with cable. Sound familiar in parks these days?
2. They don’t buy the stream profits either. It’s a sales pitch to investors. If they knew the money was there…they wouldn’t have waited so long to get in the game. Same goes for the other studios

Easy money draws like bugs to a light. “Wait and see?” Is a gigantic red flag

i would blame Iger - as the person in charge he should have seen the end of the ESPN model-and began to transition to new ways of business long ago rather than milking the dying cow dry. As Truman said the buck stops here, the blame is on his shoulders

The situation sounds like Kodak - they kept pushing film long after they should have embraced digital because they wanted the revenue to transition but ended up loosing the future because they waited too long. Compare them to Fujifilm who have carved out a nice niche in the digital world as well as diversifying the company into new markets like medicines.

 

[UNCgolf]

It's very unlikely that any company can make the same kind of money streaming sports that they did when it was part of a cable package -- it's why sports media rights deals are likely to decline in the future (barring some major shift).

Networks like ESPN were heavily subsidized by cable subscribers who had no interest in their product and never watched the channel; they made a killing on carriage fees. There's no easy way to recoup that via streaming, because people who aren't interested aren't going to subscribe.

 

[HauntedPirate]

It's very unlikely that any company can make the same kind of money streaming sports that they did when it was part of a cable package -- it's why sports media rights deals are likely to decline in the future (barring some major shift).

Tell that to the NBA, who is rumored to be wanting to double their TV contract revenue with the next round of contracts due soon. And if Disney willingly gets back into bed with the NBA on that, they deserve what they get.

 

[CinematicFusion]

Why? Because people don't like sports anymore?

The Mouse House isn’t sure what to do with its languishing cash cow, ESPN.

The sports network, once a financial engine for Disney, is suffering a decline in revenue owing to the slow death of traditional cable TV. Disney is looking to sell off a stake and transform the business into a digital streaming company, though near-term plans for that are unclear.

Cable subscribers are an endangered species.

Since streaming platforms started their rise in the mid-2000s, cable television has been on the decline. In the first quarter of 2023, cable and live TV providers lost 2.31 million subscribers, Cord Cutters News reported.

Streaming platforms offer cheaper subscription options and let viewers watch what they want, when they want from their massive libraries of shows and movies. The average cable bill is over $200 a month, according to U.S. News & World Report. In comparison, the standard Netflix subscription plan is $15.49 a month.

ESPN’s two main revenue streams rely on cable: affiliate fees from cable providers and ads. Affiliate fees are monthly fees paid by cable providers for the right to offer ESPN channels to households. ESPN collected around $626 million in affiliate fees in 2022, according to the New York Times, citing S&P Global Market Intelligence.

 

[el_super]

Streaming platforms offer cheaper subscription options and let viewers watch what they want, when they want from their massive libraries of shows and movies

Is that to say that people are watching more Netflix and Hulu than ESPN though? That people are turning away from traditional sports broadcasting and watching alternative forms of entertainment?

I get that cable is dying off, but cable is just a distribution method. Music didn't die off when vinyl records disappeared. Is there an actual decline in the demand for sports programming?

ESPN’s two main revenue streams rely on cable: affiliate fees from cable providers and ads. Affiliate fees are monthly fees paid by cable providers for the right to offer ESPN channels to households. ESPN collected around $626 million in affiliate fees in 2022, according to the New York Times, citing S&P Global Market Intelligence.

So the quick google search I did yielded a 2020 estimate that ESPN accounted for about $9/mo of every cable bill. How much would it need to be to make up the difference in lost bundled subscribers? $15? $20?

I think it's a little strange to think that most people that subscribed to cable, were paying those outrageous fees for their access to the "90 Day Fiance Universe" and had no interest in sports.

 

[CinematicFusion]

Is that to say that people are watching more Netflix and Hulu than ESPN though? That people are turning away from traditional sports broadcasting and watching alternative forms of entertainment?

I get that cable is dying off, but cable is just a distribution method. Music didn't die off when vinyl records disappeared. Is there an actual decline in the demand for sports programming?




So the quick google search I did yielded a 2020 estimate that ESPN accounted for about $9/mo of every cable bill. How much would it need to be to make up the difference in lost bundled subscribers? $15? $20?

I think it's a little strange to think that most people that subscribed to cable, were paying those outrageous fees for their access to the "90 Day Fiance Universe" and had no interest in sports.

even if a deal (Amazon) comes together, how much could the companies charge for an ESPN streaming network? According to reports, the monthly amount could run as high as $35. If so, that would make the service by far the most expensive streaming network available — more than double what Netflix and Max currently charge.

 

[CinematicFusion]

Is that to say that people are watching more Netflix and Hulu than ESPN though? That people are turning away from traditional sports broadcasting and watching alternative forms of entertainment?

I get that cable is dying off, but cable is just a distribution method. Music didn't die off when vinyl records disappeared. Is there an actual decline in the demand for sports programming?

Sports won’t die off but the cable revenue bundles will. Many were forced to include ESPN in their cable bundle, people who would never watch espn were paying for it.. this reduced the cost of ESPN

Now those who want ESPN would have to pay 35.00 a month for it to make sense for Disney.

Are you going to pay 35.00 for ESPN? I’m not and I love sports.

 

[el_super]

Are you going to pay 35.00 for ESPN? I’m not and I love sports.

I hate sports, but I still think $35 a month is pretty reasonable. How many sportsbars, pubs, taverns, waterholes and Chili's have been paying the $100+ a month to get live sports through DirecTV or Cable? They certainly weren't spending that to put Temptation Island on.

 

[CinematicFusion]

I hate sports, but I still think $35 a month is pretty reasonable. How many sportsbars, pubs, taverns, waterholes and Chili's have been paying the $100+ a month to get live sports through DirecTV or Cable? They certainly weren't spending that to put Temptation Island on.

Break it down for me… why do you think ESPN will continue to be the cash cow Disney needs it to be?
I don’t see the numbers working at the moment.

 

[JoeCamel]

Sports won’t die off but the cable revenue bundles will. Many were forced to include ESPN in their cable bundle, people who would never watch espn were paying for it.. this reduced the cost of ESPN

Now those who want ESPN would have to pay 35.00 a month for it to make sense for Disney.

Are you going to pay 35.00 for ESPN? I’m not and I love sports.

ESPN is going to be sold to sports addicts and gamblers at 30 a pop. Solid base but limited demo. No longer a money machine it will fade into irrelevance as TV into cable into internet has been leaving TV adrift and it will be a remember when story. Bob should've seen it coming and acted sooner. Maybe it is a "Slow Bob" problem

 

[MisterPenguin]

With ESPN no longer getting huge revenue through cable carriage fees, it will have to charge streaming subscribers what it costs. Part of that will be funded by ads.

But the cost for a sports license is becoming ridiculously high. This is what's leading to forecasts of $30/month subs.

But streamers are competing with one another to get those rights. And Disney can no longer really compete while Wall Street is whipping them for D+ not throwing a profit yet (even tho the original 'guidance' was that it would be profitable in 2024).

Disney passed on the Indian Cricket League because the cost was stupidly high. And that led to millions in India de-subbing. The Indian ARPU was only 59 cents, so, not a big loss, but the millions of lost subs became unnuanced headlines. There was one analyst that applauded Disney's courage at the time to walk away and not throw giant wads of cash for little payback.

But you know who can throw giant wads of cash? Amazon and Apple. They can lock down all the big sports license and take the loss. And that's why Iger's looking for an ESPN team-up to help foot the bill for ever-increasing sports license.

So, two scenarios:

​

1. Streamers balk at the ever-growing ridiculously extravagant sports license; and then the sports league have to re-adjust players' salaries and owners' bigger salaries; OR...​

​

2. As part of the streaming wars, Amazon and Apple jump in to pay for those ridiculously high licenses and freeze-out the other streamers, who will have to get into bed with Amazon and/or Apple. And then later pass that cost to customers with even greater sub fees.​

Option 2 is already manifesting...

 

[J4546]

I think the gambling is gonna bring in soooo much money to Disney. Seriously like billions

 

[JoeCamel]

I think the gambling is gonna bring in soooo much money to Disney. Seriously like billions

The boys in Vegas might have something to say about that

 

[MrPromey]

Is that to say that people are watching more Netflix and Hulu than ESPN though? That people are turning away from traditional sports broadcasting and watching alternative forms of entertainment?

I get that cable is dying off, but cable is just a distribution method. Music didn't die off when vinyl records disappeared. Is there an actual decline in the demand for sports programming?




So the quick google search I did yielded a 2020 estimate that ESPN accounted for about $9/mo of every cable bill. How much would it need to be to make up the difference in lost bundled subscribers? $15? $20?

I think it's a little strange to think that most people that subscribed to cable, were paying those outrageous fees for their access to the "90 Day Fiance Universe" and had no interest in sports.

ESPN has been a part of my cable package for as long as I can remember.

My interest in sports is close enough to zero it could be called a rounding error for one..

I think I watched the rock-paper-scissors world championships on ESPN2 a singular time.

If I could have gotten a nickle off my cable bill for dropping ESPN and ESPN2 I'd have done it in a heartbeat.

These days in my hood, cable is included in my association fees so I can't cancel and too many older people around me use it to vote down renewing that contract* but I have two cable boxes and don't know where the remotes are for either of them.

I guess I'm still helping support ESPN?

But I'm entirely certain I'm not alone in my complete apathy for it. In my social circle, I can think of two households out of a few dozen who give a rats patootie about anything sports related. They're into pro home-team stuff that I'm not sure ESPN even touches - I really don't know since I don't watch it but I think that stuff is on local TV?

Anecdotal evidence is, well, anecdotal but my point is, it might be more people than you think.

As a sports person, it may be hard to fathom that there are people who would rather do just about anything than watch people get paid obscene amounts of money to play with a ball or a puck but we're out there, we're all around you... and you should be afraid!

*I managed to get high-speed internet included which a lot of them weren't happy about so I'd say we're sort of even.

 

[GimpYancIent]

The boys in Vegas might have something to say about that

Actually, the Seminoles. (as in the tribe)

 

[Sirwalterraleigh]

The way espn worked in cable was that the providers had to pay high fees because ESPN brought in the large advertising revenue…regardless if people actually watched it or not. In turn Disney had the cable outlets over the barrel so they forced lifetime, A&E, Disney channel, etc on them…and then used it to sell even more ads that brought in easy revenue…
And in the ultimate cluster: then charged more to Comcast because they sold so much ad space.

It was an amazing dynamic that just can’t happen with stream. On-demand programming kills 90% of it because the entire model was the captive audience to sell ad space.

Anyone under 30-35 has zero memory now of “running home to watch a show/game”

But we did it…it was the basis of all that free cash to Hollywood.

 

[Robbiem]

The boys in Vegas might have something to say about that

I still think a Vegas tie up with one of the casino chains would be an interesting idea for Disney.

There are so many ideas for Disney‘s IP holdings that would appeal more to the adultcentric vegas but might be too adult for the parks. I could imagine a full star wars cantina bar / restaurant, an aliens adventure experience etc

They could even have con air the ride down las vegas boulevard

 

[HauntedPirate]

The boys in Vegas might have something to say about that

Or the tribes in Florida.

 

[Tha Realest]

The inherent problem with ESPN is it doesn’t own the media being consumed- it’s merely a gateway. Those rights deals become more and more expensive and it doesn’t make sense for the leagues or the conferences to pay a middle man. Especially as stuff like NFL Sunday Ticket and packages get decoupled altogether from ESPN and cable.