Which companies could buy a stake in Disney's ESPN?

As Disney (DIS) seeks a new strategic partner for ESPN and is considering selling his majority stake in the network, there are many companies he could consider for a partnership.

Key Points to Remember

Disney CEO Bob Iger said Thursday that the company is planning to transition ESPN from a former sports network to a streaming platform, and is considering strategic partners for it. help in the process.
Big tech companies like Apple, Amazon, or Alphabet, Google's parent company, would benefit as all three invest heavily in sports content and expand their streaming options.
Disney could also sue traditional telecommunications companies like Comcast, AT&T or Verizon, which could more easily integrate ESPN into their existing networks.

In an interview with CNBC on Thursday, Disney CEO Bob Iger said the company plans to transition ESPN from a legacy sports network to a streaming platform similar to ESPN+ or Disney+, and is considering strategic partners to help in the process. Disney has plenty of options available to it, from traditional telecommunications companies to tech giants looking to grow their streaming business.

A partnership with a big tech company like Apple (AAPL), Amazon (AMZN) or Google's parent company Alphabet (GOOGL) could be lucrative as the tech giants aim to expand their streaming presence.

All three already own sports content and invest heavily in sports programming. Amazon and Google have teamed up with the NFL to stream “Thursday Night Football” and "Sunday Ticket," respectively, while Apple owns the streaming rights to “Friday Night Baseball”; and Major League Soccer (MLS) matches.

“Apple and Amazon have money to spend, a desire to go deeper into sports content, and the right platform infrastructure. Both currently offer direct-to-consumer (DTC) premium subscription channels ) to which their subscribers can subscribe for an additional fee, making them likely candidates for this type of DTC distribution partnership,” Wedbush Securities analyst Alicia Reese said in an email. p>

Disney could also pursue a partnership with a traditional telecommunications company like Comcast (CMCSA), AT&T (T) or Verizon (VZ), all of which have a strong media and entertainment presence, and could incorporate ESPN into their offerings. existing. .

The Decline cable tv

Falling cable TV viewership is a major reason Disney is considering selling ESPN, along with several other failing networks such as ABC, NatGeo and FX.

In 2018, Disney launched its ESPN+ streaming service, but stopped putting top-notch ESPN content on the platform because its cable TV business was still generating billions of dollars in revenue. However, the rise of streaming platforms like Netflix, Hulu, Prime TV, Disney+ and others has accelerated cable's decline, with millions of Americans canceling their subscriptions each year.

More than 25 million American households dropped their cable TV subscriptions between 2016 and 2021, Insider Intelligence reported, with subscriptions expected to fall another 4.8% this year. Meanwhile, the share of US households with a traditional pay-TV subscription is expected to fall below the majority for the first time in decades.

Operating profit for Disney's national cable channels fell 33% year-over-year in the last fiscal quarter to $1.57 billion from $2.35 billion. dollars in the same quarter last year.

"The disturbance of the traditional television industry is the most notable," Iger said in the CNBC interview. “If anything, it happened to a greater extent than I thought.”

Disney stocks are up just below 2% so far this year. They are down 54% from an all-time high in early 2021.