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Disney’s Next Act: Speculating on Hollywood’s Hottest Topic

What Will Bob Iger Do Next? is the week’s most popular parlor game in Hollywood.

Power brokers in the U.S. media and entertainment sector are concocting scenarios about the future and the potential dissolution of the sector’s most dominant corporation from Culver City to New York City.

The company’s television operations, including its stations and cable channels, “may not be core to Disney,” said Walt Disney Chief Executive Iger in a mid-July interview with CNBC. Iger left the company in November and returned for a second tenure.

According to a banker who spoke to Reuters under the condition of anonymity, his comments sparked a flurry of activity among bankers and private equity firms who started evaluating if they should “make a move.”

During Disney’s third-quarter results call with investors last week, Iger said the firm is considering strategic partnerships for its flagship sports brand, ESPN, and had received “notable interest,” albeit Disney intended to maintain control. This stoked speculation.

The company’s film studios, theme parks, and streaming video are the three divisions that will generate the most growth over the following five years, according to him.

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Potential Spin-Offs and Streaming Expansion

What Will Bob Iger Do Next? is the week’s most popular parlor game in Hollywood.

One prominent media executive envisioned Iger separating Disney’s cable networks like Disney Channel or FX, local TV stations, and the ABC broadcast network into a new firm and funding it with the right amount of debt.

By 2024, according to a seasoned media executive, Disney will spin off the television asset to its stockholders as a distinct, publicly traded company, with private equity perhaps playing a role.

A fourth media executive, who has managed both traditional and digital media organizations, stated that Disney could need to find outside investors for ESPN in order for it to compete for increasingly expensive sports media rights, such those for NBA games, which expire after the 2024–25 season. Costs associated with these rights are rising.

That might free up funds for Disney to buy NBCUniversal’s share in Hulu and seize full control of the streaming service the following year.

In accordance with a 2019 agreement, Comcast, the parent company of NBCUniversal, can demand that Disney purchase the Hulu interest from NBCUniversal or that NBCUniversal sell it to Disney for at least $5.8 billion as early as January 2024.

Disney opted not to respond.

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Source: Reuters

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