Disney is preparing to spin-off ABC & ESPN. The networks will become independent companies - entirely separate from Disney - sometime, in 2023. Earlier this year, investor Dan Loeb urged Disney to commit to this undertaking and offered this justification:
ESPN would have greater flexibility to pursue business initiatives that may be more difficult as part of Disney, such as sports betting. Customers of ESPN and sports leagues would be better served by a focused management team driving a leadership position in sports distribution. 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.
The looming presence of sports betting and its complications notwithstanding, media and telecom industries are also losing money. Expect major mergers in 2023:
Fueled by sinking stock prices, debt-ridden balance sheets, increased competition, and a renewed focus on profitability, media and entertainment companies are reevaluating their portfolios as industry watchers expect more merger activity in 2023.
"It's a pretty good inflection point," Jon Christian, EVP of digital media supply chain at Qvest, the largest media & entertainment-focused consulting company, told Yahoo Finance. "The game has changed. It used to be just subscribers at all cost...but now [investors] need these services to be profitable."
Bart Spiegel, partner of global entertainment & media deals at PwC, added: "We're entering a chapter two of the streaming wars."
"Only time will tell, but I think everything's on the table to try to improve profitability and make the platforms more creative to their overall business," he continued.
How we watch college football is likely to change dramatically, beginning next year.
