Disney Investor Daniel Loeb Changes Mind on ESPN Spinoff

Third Point founder Daniel Loeb took to Twitter Sunday, announcing he’s changing course on a previously announced effort to compel to Walt Disney (NYSE:DIS) to consider spinning off ESPN.

Loeb ESPN
Loeb ESPN
Third Point founder Dan Loeb. He’s relenting in his quest to push Disney to spin-off ESPN. (Image: Wall Street Journal)

Last month, the activist investor announced his hedge fund took a stake then valued at $1 billion in the media and entertainment giant. The move was with an eye toward pushing the California-based company to unlock shareholder value by shedding the self-proclaimed worldwide leader in sports. A Sunday tweet indicates Loeb has had a change of heart.

We have a better understanding of @espn’s potential as a standalone business and another vertical for $DIS to reach a global audience to generate ad and subscriber revenues,” wrote Loeb on the social media platform.

In a subsequent tweet, he added Third Point is looking forward to what ESPN and Sports Content Chairman James Pitaro’s plans are for boosting ESPN value. That’s as the sports network remains part of the broader framework of the company.

Sports Betting Implications

When Loeb said in August that Third Point owned Disney shares — the hedge fund’s second go-round with the company — he made remarks that implied ESPN as a standalone entity would be better positioned to capitalize on the US sports wagering boom.

“Customers of ESPN and sports leagues would be better served by a focused management team driving a leadership position in sports distribution,” wrote the Third Point founder. “We believe that most arrangements between the two companies can be replicated contractually, in the way eBay spun PayPal while continuing to utilize the product to process payments.”

ESPN has long been tied to a variety of sports wagering-related rumors. Last month, Disney CEO Bob Chapek potentially added fuel to that speculation, telling investors the company could soon make a significant sports betting announcement. However, it’s unlikely that will include ESPN being separated from the Disney empire.

In a recent interview with Variety, Chapek made remarks that imply ESPN will remain a part of the Disney portfolio. He noted Disney fielded about 100 calls regarding the fate of the sports network when rumors swirled it could be for sale.

“What does that tell you? That says we’ve got something really good,” he said. “And if you have a strategic plan, a vision for where it fits into the company over the next 100 years, then you don’t exactly want to divest yourself of it. And we have that plan. We’ve not shared that plan.”

ESPN Sports Betting Rumors

While Loeb’s comments put to rest notions that ESPN will be spun-off from Disney, the rumor mill surrounding the sports network’s betting ambitions is likely to keep spinning.

The conjecture usually involves Disney acquiring a sportsbook operator and folding that company into ESPN, leveraging the sports network’s robust brand appeal in the process.

Disney, a member of the Dow Jones Industrial, has the resources to acquire a variety of sportsbook companies with little to no strain to its balance sheet. However, it remains to be seen if that’s the route Disney chooses to pursue.

The post Disney Investor Daniel Loeb Changes Mind on ESPN Spinoff appeared first on Casino.org.

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