• by Wayne Friedman , July 13, 2023

Disney CEO Bob Iger is mulling the idea of selling the company's linear TV networks, he said Thursday on a rival's linear TV network.

Iger told CNBC that the networks, which include the likes of ABC, ESPN and Disney Channel, “may not be core to Disney," adding, "clearly it’s a business that is going to continue to struggle.

“There clearly is content that they create that is core to Disney, but the distribution model, the business model that forms the underpinning of that business — and that is delivering great profits over the years — is definitely broken, and we have to call it like it is.”

For some time now, Disney and analysts have speculated about the idea of spinning off ESPN.  Based on Iger's new remarks, that perspective looks to be broader.

“Given the low valuations attached to standalone linear networks, it isn’t clear that there is an accretive move to be made here. Simply exiting bad businesses at any cost might be the price you pay to limit management and investor distractions in the long run," Michael Nathanson, senior research analyst and co-founder of MoffettNathanson Research write in report distributed Thursday.

Nathanson, however, said he believes the proposition for ESPN may be different: “Unlike other Disney linear networks, ESPN is still a core strategic unique asset for Disney that the company is looking at differently. While Iger confirmed ESPN will ultimately end up over-the-top [as a streaming service... Disney is also open to ESPN partnerships to help with distribution and content as well as capital to de-risk the asset for the company.”