Analyst Predicts ESPN Spin-off Under New Disney Leadership

LightShed Partners analyst Rich Greenfield, speaking on The Town with Matthew Belloni, has shared a significant prediction regarding Disney's executive changes.

Greenfield predicted that Disney would likely spin off ESPN within the next 18 months, following Josh D'Amaro's promotion to Disney CEO in March.

Rationale for Spin-off

Greenfield suggested that D'Amaro's leadership could lead to a separation of ESPN, similar to Warner's previous corporate restructuring. He believes this separation would allow Disney to invest in new priorities, such as gaming.

When questioned by Belloni about Bob Iger's previous rejection of such a strategy, Greenfield indicated that the change in leadership and current circumstances alter the viability of the move. He added that ESPN is well-positioned for the next decade regarding sports rights and that the direct-to-consumer (DTC) service has launched, making it an opportune time for a spin-off.

Potential Partners and Valuation

The analyst mentioned Comcast as a potential partner for a spun-off ESPN. Industry speculation, noted by Belloni, suggests that ESPN's recent equity deal with the NFL, valuing the network at $30 billion, might have been made in anticipation of a potential spin-off.

This is not the first time LightShed has predicted such a move, having done so when the NFL deal was announced. D'Amaro's promotion has reportedly reinforced the firm's conviction regarding a significant change for ESPN.