Bob Iger, the CEO of Disney, is reportedly selling off a significant portion of the company’s assets, including its cable and broadcast TV operations. This comes amidst an industry-wide shift from cable TV to streaming platforms. Iger announced that ABC TV, the FX cable networks, National Geographic, and Freeform are up for sale. Additionally, he is seeking a partner for ESPN, which has been struggling.
The assets up for sale represent a large chunk of Disney’s revenues and operating income. The rationale behind this decision is the rapidly declining cable/satellite TV industry. More and more people are choosing streaming services, some of which are free, over cable TV. For years, cable TV had provided entertainment companies, including Disney, with substantial profits, regardless of how often certain channels were watched.
However, streaming platforms are forcing entertainment companies to perform on merit. This is proving difficult for Disney+, which is reportedly losing billions every year. Traditional cable and broadcast networks are also losing viewership, and soon there may not be enough cable subscribers to sustain these networks. It’s estimated that Disney could sell these assets for about $8 billion.
If Disney is opting out of cable networks, this raises concerns for companies like Paramount Global and Warner Bros Discovery Inc., which derive most of their profits from such networks. Furthermore, Iger is reluctant to sell the large properties he acquired, such as LucasFilm, Marvel, Pixar, and Fox, as it would reveal their depreciated value and suggest Disney’s overall market valuation might be significantly inflated.
Critics have accused Disney of being creatively stagnant and damaging their brand with controversial political stances. The transition from cable TV to streaming, combined with these issues, has led to a downturn in Disney’s fortunes, with decreased theme park attendance and a drop in stock prices.