Disney CEO Bob Chapek speaks at 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 sees no reason for Disney-owned ESPN to add minority partners.
“Strategically, I don't really see any benefit in bringing another minority partner into 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 strengthen the sports network's content or technology as he plans a new direct-to-consumer offering, which he later said would launch in the fall 2025.
The company has not yet announced a deal to sell a stake in ESPN. CNBC reported in August that the network had held talks with major American professional sports leagues, including the National Football League and the National Basketball Association, about potential partnerships or investments.
Disney owns 80% of ESPN and Hearst owns the other 20%, a structure that has existed since 1996. In seeking a partner, Disney wants enhance ESPN's direct-to-consumer content, distribution and marketing, for which pricing has not yet been set, Iger said during Disney's quarterly earnings conference call in August.
Striking a partnership with one of the professional sports leagues could help secure live rights in the future, although it may irritate other media companies bidding against Disney for game packages. Adding a technology or telecommunications company like Verizon or Apple could give ESPN broader distribution options by reaching larger customer bases.
Still, it's not clear that selling shares in ESPN is necessary 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 build a partnership with a league or other company.
“It's not about equity,” Pitaro said. “It's not about these partners acquiring an ownership stake in ESPN. That's something, as Bob says [Iger] “We're very open to it, but it's about a partnership and accelerating the launch or adoption of the ESPN flagship.”
Chapek's first interview since his dismissal in 2022
Chapek's comments are his first public statements since Disney's board fired him and brought back Iger as CEO about 16 months ago. He and Iger, who had remained CEO of Disney, had a strained relationship that progressively worsened during Chapek's tenure as CEO, which lasted nearly three years, from 2020 to 2022, as CNBC documented 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 bring in a partner for strategic reasons, he did acknowledge that Disney could do it to raise cash to pay for Comcast's one-third stake in Hulu, which Disney has committed to buying. for at least at least 8.6 billion dollars.
“There is 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 that you make some cash available. And given some of the conversations that have been going on between Comcast and Disney in terms of needing to buy out the back end of Hulu to make it fully owned by the company Disney company, it's possible that maybe that money itself is what they're looking for.”
ESPN President James Pitaro at a New York Yankees baseball game at Yankee Stadium in New York City on June 19, 2019.
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Center for all sports
Chapek also talked about the vision he had as CEO of turning ESPN into a centralized hub for directing consumers to where a game is broadcast, regardless of which company owns the rights to broadcast it, a concept first reported by CNBC 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, Netflix, Disney+, Hulu or wherever,” Chapek said. “The way I find out is that I go to the Apple TV, plug in the movie I want to watch, and they direct me exactly where that movie is. And then they seamlessly plug me in without me having to go out and go to another app to find the program in that application. “I think ESPN should be that source for a central clearinghouse.”
Adding unique navigation can help ESPN become the first place sports fans go 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 the sports viewer so that they stay with you as you evolve into a streaming world? I think solving that problem would be a great way to do it,” Chapek said.
WATCH: Bob Chapek discusses the future of ESPN
