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February 10, 2023

Amid job cuts, restructuring, Disney CEO says no plans to spin off Bristol-based ESPN

ESPN President James Pitaro

The parent of ESPN on Thursday announced a corporate restructuring and 7,000 job cuts, but also reaffirmed its commitment to the Bristol-based sports broadcast media giant. 

The Walt Disney Co. this week said its strategic restructuring will divide the company into three different business units: Disney Entertainment; ESPN, which has its sprawling campus headquarters in Bristol; and Disney Parks, Experiences and Products. 

Disney this week also announced plans to cut 7,000 jobs across its footprint in an effort to trim $5.5 billion in costs. The move was announced by CEO Bob Iger, who returned to lead the company in November after stepping down from the role in 2020. He replaced his successor Bob Chapek who was ousted from the CEO job following investor pressure and criticism. 

Iger this week talked specifically about ESPN’s future, saying Disney has no plans to spin off the business, something that was previously encouraged by activist investor Dan Loeb. Loeb later backed off that suggestion. Disney was also facing pressure from activist investor Nelson Peltz, who backed off this week after the company announced its plan to cut costs. 

ESPN has faced challenges from the cord-cutting trend as consumers continue to ditch cable TV. ESPN launched its streaming ESPN+ network as a response. 

In an earnings call with analysts this week, Iger said ESPN remains “the best sports brand in television. It's one of the best sports brand in sports. It continues to create real value for us. It is going through some, obviously, challenging times because of what's happened in linear programming.”

He continued, “But the brand of ESPN is very healthy, and the programming of ESPN is very healthy. We just have to figure out how to monetize it in a disrupting and a continuing -- or disrupting world. That's it. But we're not engaged in any conversations right now or considering a spin off of ESPN.”

Meantime, ESPN will continue to be led Jimmy Pitaro as part of the restructuring. 

Disney this week reported fiscal first-quarter earnings of $1.28 billion, up 11% from the year-ago period. 
 

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