Recently, Wells Fargo made a major prediction about what 2023 holds for Disney, the entertainment giant that careened off the rails went it went woke under the previous CEO, Chapek. Now, back in the hands of Bob Iger, Disney has to turn its fortunes around before it’s too late and Wells Fargo is claiming that Disney will need to shed assets like ABC and ESPN to effect that change.
Reporting on what Disney might do and why, Fox Business Online reported that:
According to bank analysts, Iger will shift the mass media and entertainment company’s focus to content and cost rationalization while spinning off broadcast network ABC and cable sports channel ESPN.
Spinning off the two networks is the best path forward and a probable late 2023 event, leaving the Walt Disney Company an attractive pure play intellectual property company, the bank predicted.
Further, the report goes on to note that Disney would likely have to get rid of both ABC and ESPN because the two are linked and are different than what Disney is generally involved in, with Fox Business saying:
While ESPN has been the cash cow of the pair, linear and sports trends are diverging from the core IP. In addition, the sports network is not owned IP or global like Disney, so “we think severing the company is increasingly logical,” the analysts stated. ESPN is owned 80% by Disney and 20% by Hearst Corporation.
The analysts also stated they think ESPN and ABC are integrally linked, and are moving away from their streaming contemporaries. They added that owned IP monetizes differently versus licensed IP in sports and will lead to the eventual spinoff of ESPN and ABC.
Breitbart, adding more details about what might be going on and why, noted that:
ESPN, in particular, is in a tough spot in planning for the future. As Axios recently noted, ESPN ended 2021 with 76 million cable subscribers, which was down another ten percent from the 84 million it had in 2020. And each year previous to that, the network has lost a similar number of viewers.
In another sign of the times, ABC lost its third-place standing in the ratings last year as cable news network Fox News claimed the third most viewers in primetime, according to a Forbes report.
This is an unheard of success for a cable network considering that the big three TV networks — CBS, NBC, and ABC — were once the unchallenged kings of television broadcasting.
So things are going badly enough for Disney that it’s having to retrench and shed some assets, including the ESPN “cash cow”. Looks like this might be one of the few cases where “go woke, go broke” actually turned out to be true and the company has paid the price, with Disney losing over $100 billion in market value as consumers shun its products and DeSantis looks less likely to back down from teaching it a lesson by revoking its special tax status.
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