The Information speculates that Disney may spin-off the ESPN sports TV business (in which Hearst Corp is a 20% shareholder) within the next few years. That is its conclusion in view of the $70.4bn that Disney has committed to pay for the rights to sports programming – which has mushroomed by 73% in the past year, due mostly to its contract with the NFL. But there’s more.
The Information says: “The fact that Disney, and other broadcasters, agreed to hefty increases is old news, of course. What we didn’t know… was just how much Disney is now on the hook to pay. Disney will be carrying this burden over the next decade or more, a period in which the cable TV universe, which historically supported these payments, will likely shrink drastically. And sports programming is just one of a number of bills that Disney has coming due, some sooner than others. Starting in January 2024, NBCUniversal has the right to sell its 33% stake in Hulu to Disney for a price that’s at least $9bn and probably significantly more. From next September, Major League Baseball has the right to sell its stake in tech business BAMTech to Disney for at least $820m. Then there’s Disney’s spending on its streaming services, which are soaking up increasing amounts of money… Disney expects to increase its content spending in fiscal 2022 by about 32% to $33bn”.
