At this point, it’s too early to know what Josh D’Amaro’s promotion to Disney CEO will mean for ESPN.
One prominent industry analyst, however, is predicting that it could lead to a major change.
Appearing on The Town with Matthew Belloni, LightShed Partners’ Rich Greenfield discussed Disney’s announcement that D’Amaro will succeed Bob Iger as the company’s top executive this March. And while noting the inherent challenges that ESPN faces in the current media landscape, the analyst said he believes the network will ultimately get spun off under the direction of its parent company’s incoming CEO.
“I believe Josh D’Amaro understands everything that you and I are talking about,” Greenfield said. “And I believe — I don’t know if it happens in the next six months in their fiscal year — but I would say over the next 18 months, I would be shocked if Disney didn’t move forward with a separation of the company to resemble what Warner did and then use that separation to invest in gaming or some other priority that when Josh looks at it, where he can put his stamp and say, ‘this is what the Disney of the next decade is going to look like.’”
After Belloni pointed out that Iger had already rejected such a strategy, Greenfield responded, “Who’s in charge now?” before noting that the circumstances have since changed.
“I think ESPN is very well set up for the next decade in terms of sports rights. And I think the DTC has launched, I think now would be the time,” he said. “Like, I think he’s achieved what he wanted to achieve and I think this is the right time to set that asset free.”
As for who could potentially buy or strategically partner with a spun-off ESPN, it’s too early to say. Greenfield, however, noted that Comcast has signaled that it’s open for business, while there will be an odd man out once Netflix and Paramount’s respective pursuits of Warner Bros. are settled. Belloni also stated that some within the industry believe that ESPN’s recently approved equity deal with the NFL was largely about the network obtaining a $30 billion valuation in advance of a potential spinoff like the one Greenfield is forecasting.
It’s worth noting that this isn’t the first time that LightShed has predicted such a move, as it similarly did so when the NFL deal was first announced last summer. D’Amaro’s pending promotion, however, has seemingly only strengthened the research firm’s belief that a seismic shift for the Worldwide Leader in Sports is likely on the way.
