Entertainment giant Disney (NYSE:DIS) has long been working to get its ESPN operations properly established. Indeed, former Disney CEO Bob Chapek recently joined in on a CNBC documentary titled ESPN’s Fight for Dominance, which took a closer look at Disney’s strategy as it relates to ESPN. This is actually the first time Chapek has offered public comment about a Disney matter since November 2022, and what he said was quite surprising: ESPN needs no strategic partners.
That’s pretty much what he said: “Strategically, I don’t really see a benefit in bringing on yet another minority partner into ESPN.” The impact of such a move is potentially great; it may be helpful in landing future rights. However, it may also pose trouble with other media companies who want those same rights.
ESPN’s Value Is Starting to Dwindle
What should ESPN’s future look like? While Chapek doesn’t see much value in minority partners, current CEO Bob Iger is looking into the matter as a way to raise capital to improve technology or similar issues. With linear television weakening, ESPN’s value to the cable package is starting to dwindle, even as it represents more than $10 per subscriber in cable bundles.
But its value is also in open decline; in 2011, ESPN was in 100 million homes with cable. Now, that number has dropped to 71 million. It’s clear something needs to be done, and it’s not surprising that Disney isn’t exactly sure just what that is yet.
Is Disney a Buy, Hold, or Sell?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on DIS stock based on 18 Buys, four Holds, and one Sell assigned in the past three months, as indicated by the graphic below. After a 23% rally in its share price over the past year, the average DIS price target of $119 per share implies 2.31% upside potential.
