{"id":254132,"date":"2023-01-17T17:15:50","date_gmt":"2023-01-17T23:15:50","guid":{"rendered":"https:\/\/www.casino.org\/news\/?p=254132"},"modified":"2023-01-17T18:10:12","modified_gmt":"2023-01-18T00:10:12","slug":"espn-spin-off-could-be-used-to-satisfy-activist-investor-peltz","status":"publish","type":"post","link":"https:\/\/www.casino.org\/news\/espn-spin-off-could-be-used-to-satisfy-activist-investor-peltz\/","title":{"rendered":"Disney Facing Complexities with Potential ESPN Spin-Off"},"content":{"rendered":"

Facing a challenge from yet another activist investor, The Walt Disney Co. (NYSE: DIS) could examine spinning off ESPN<\/em> and perhaps all of its traditional media business. But there are complexities tied to such a transaction.<\/p>\n

\"ESPN
Trian Fund Management managing partner Nelson at a 2016 conference. Disney may consider spinning off ESPN<\/em> to appease him. (Image: Mike Blake\/Reuters<\/em>)<\/figcaption><\/figure>\n

There\u2019s speculation among investment bankers that Disney could move forward with plans to separate ESPN<\/em> and possibly ABC-TV in a bid to placate new activist investor Nelson Peltz. Last week, Peltz revealed that his Trian Fund Management purchased approximately 9.4 million shares of Disney, then valued at around $900 million. He joined Third Point founder Daniel Loeb<\/a> as the activists that took stakes in Disney in recent months.<\/p>\n

\n

Peltz is pushing for a board seat — a proposition Disney is rebuffing\u00a0 — but in Trian\u2019s \u201cRestore The Magic\u201d presentation, the investor says it is not seeking a breakup of Disney. In fact, neither ESPN<\/em> nor sports wagering are highlighted anywhere in the Trian materials.<\/p>\n<\/div>\n

When Third Point revealed its Disney stake last August, the hedge fund overtly mentioned the idea of an ESPN <\/em>spin-off, positioning the sports broadcast network to capitalize on the proliferation of sports wagering. But the following month, Loeb backed away from that idea, saying Disney remaining whole was preferable.<\/strong><\/p>\n

Iger Return Could Hasten ESPN Spin-Off<\/h2>\n

Some analysts believe that Bob Iger\u2019s recent return as chief executive officer of Disney could be an impetus for the spin-off of ABC and ESPN,<\/em><\/a> because the prevailing wisdom is that Iger wants to focus on the company\u2019s theme parks and intellectual property offered by assets such as Marvel, Pixar, and Star Wars.<\/p>\n

Traditional media don\u2019t offer the economic benefits of Disney\u2019s intellectual property-rich franchises. It remains to be seen if Peltz will warm to the idea of separating old guard media assets. But he clearly says Trian isn\u2019t auguring for a breakup of Disney, nor does the investor want the company to cut costs in such a way that consumers will be ruffled.<\/p>\n

Disney has an incredible legacy as one of the leading and most successful consumer entertainment companies in the world, having built some of the most celebrated consumer brands and an unparalleled content portfolio that resonates with audiences of all ages across the globe. But in recent years, the Company has lost its way resulting in a rapid deterioration in its financial performance from a consistent dividend-paying, high free cash flow generative business into a highly leveraged enterprise with reduced earnings power and weak free cash flow conversion,\u201d<\/strong> he wrote.<\/p><\/blockquote>\n

Trian\u2019s presentation also notes Disney\u2019s streaming arm<\/a>, which includes fast-growing ESPN+, <\/em>has lost more than $11 billion to date and is significantly less efficient than rival Netflix (NASDAQ:NFLX).<\/p>\n

Trian Wants Dividend Restored<\/h2>\n

One point of emphasis in the Trian materials is a demand for Disney to restore its dividend. From 2010 through 2019, the payout grew five-fold. But Disney cut the dividend in half in 2020, and eliminated it outright the following year.<\/p>\n

While some of that blame was attributable to the coronavirus pandemic causing months-long closures of theme parks, Peltz argues Disney paid too much in the $71.3 billion takeover of 21st<\/sup> Century Fox, which was finalized in March 2019. Oddly enough, that transaction led to Disney receiving a 6% stake<\/a> in DraftKings.<\/p>\n

Peltz is viewed as one of Wall Street\u2019s more esteemed activist investors, and his Trian Fund Management has successfully pushed for change at companies including DuPont, Heinz, Procter & Gamble and Wendy\u2019s, among others. However, Disney pointed out Trian has no experience with large-cap new media or technology firms.<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

Facing a challenge from yet another activist investor, The Walt Disney Co. (NYSE: DIS) could examine spinning off ESPN and perhaps all of its traditional media business. But there are complexities tied to such a transaction. There\u2019s speculation among investment bankers that Disney could move forward with plans to separate ESPN and possibly ABC-TV in […]<\/p>\n","protected":false},"author":46,"featured_media":254133,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[10,1,1074],"tags":[],"acf":[],"yoast_head":"\nESPN Spin-Off Could Be Used To Satisfy Activist Investor Peltz<\/title>\n<meta name=\"description\" content=\"Disney could look at ESPN Spin-Off to satisfy Nelson Peltz, but he's not asking for that.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.casino.org\/news\/espn-spin-off-could-be-used-to-satisfy-activist-investor-peltz\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"ESPN Spin-Off Could Be Used To Satisfy Activist Investor Peltz\" \/>\n<meta property=\"og:description\" content=\"Disney could look at ESPN Spin-Off to satisfy Nelson Peltz, but he's not asking for that.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.casino.org\/news\/espn-spin-off-could-be-used-to-satisfy-activist-investor-peltz\/\" \/>\n<meta property=\"og:site_name\" content=\"Casino.org\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/Casino.OrgNews\" \/>\n<meta property=\"article:published_time\" content=\"2023-01-17T23:15:50+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2023-01-18T00:10:12+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2023\/01\/NP-scaled.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"2560\" \/>\n\t<meta property=\"og:image:height\" content=\"1782\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Todd Shriber\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@etfgodfather\" \/>\n<meta name=\"twitter:site\" content=\"@Casino_Org\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Todd Shriber\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"3 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.casino.org\/news\/espn-spin-off-could-be-used-to-satisfy-activist-investor-peltz\/\",\"url\":\"https:\/\/www.casino.org\/news\/espn-spin-off-could-be-used-to-satisfy-activist-investor-peltz\/\",\"name\":\"ESPN Spin-Off Could Be Used To Satisfy Activist Investor Peltz\",\"isPartOf\":{\"@id\":\"https:\/\/www.casino.org\/news\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\/\/www.casino.org\/news\/espn-spin-off-could-be-used-to-satisfy-activist-investor-peltz\/#primaryimage\"},\"image\":{\"@id\":\"https:\/\/www.casino.org\/news\/espn-spin-off-could-be-used-to-satisfy-activist-investor-peltz\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2023\/01\/NP-scaled.jpg\",\"datePublished\":\"2023-01-17T23:15:50+00:00\",\"dateModified\":\"2023-01-18T00:10:12+00:00\",\"author\":{\"@id\":\"https:\/\/www.casino.org\/news\/#\/schema\/person\/f4cecf70a5032bc4e60eb73fc86d4a85\"},\"description\":\"Disney could look at ESPN Spin-Off to satisfy Nelson Peltz, but he's not asking for that.\",\"breadcrumb\":{\"@id\":\"https:\/\/www.casino.org\/news\/espn-spin-off-could-be-used-to-satisfy-activist-investor-peltz\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/www.casino.org\/news\/espn-spin-off-could-be-used-to-satisfy-activist-investor-peltz\/\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.casino.org\/news\/espn-spin-off-could-be-used-to-satisfy-activist-investor-peltz\/#primaryimage\",\"url\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2023\/01\/NP-scaled.jpg\",\"contentUrl\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2023\/01\/NP-scaled.jpg\",\"width\":2560,\"height\":1782,\"caption\":\"Trian Fund Management managing partner Nelson at a 2016 conference. 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