Former Disney CEO Bob Chapek says ESPN doesn’t need strategic partners

In his first public comments since Disney fired him as CEO in November 2022, Bob Chapek told CNBC he sees no reason for Disney-owned ESPN so as to add minority partners.

“From a strategic standpoint, I don’t see the advantage in bringing another minority partner to ESPN,” Chapek said within the CNBC documentary “ESPN’s Fight for Supremacy,” which chronicles the network’s digital strategy, published Thursday.

Disney CEO Bob Iger told CNBC’s David Faber in July that he would consider selling a minority stake in ESPN to strengthen the sports network’s content or technology amid plans for a brand new direct-to-consumer offering, which he later said would launch in the autumn of 2025 .

The company has not yet announced the sale of its shares in ESPN. In August, CNBC reported that the network was in talks with major U.S. skilled sports leagues, including the National Football League and the National Basketball Association, about potential partnerships or investments.

Disney owns 80% of ESPN and Hearst owns the remaining 20%, a structure that has been in place since 1996. When on the lookout for a partner, Disney wants improve the content, distribution and marketing of ESPN’s direct-to-consumer business, which has not yet been priced, Iger said throughout the Disney conference August quarterly results announcement.

Partnering with one among the skilled sports leagues could help secure future broadcast rights, even though it could irritate other media corporations which can be bidding for gaming packages against Disney. Hiring a technology or telecommunications company like Verizon or Apple could give ESPN broader distribution opportunities by reaching a bigger customer base.

It remains to be unclear whether the sale of shares in ESPN is mandatory to conclude the arrangement. ESPN CEO Jimmy Pitaro, who also spoke to CNBC as a part of the documentary, downplayed the need for the sports network to sell a stake in its business with a purpose to pursue a partnership with a league or one other company.

“It’s not about justice,” Pitaro said. “It’s not about these partners taking a stake in ESPN. That’s something, according to Bob [Iger] said we’re very open to it, but this is about partnership and accelerating the launch or adoption of the ESPN flagship.”

Chapek’s remarks are his first public appearances since Disney’s board fired him and reinstated Iger as CEO about 16 months ago. He and Iger, who remained a Disney executive, had a tense relationship that steadily deteriorated over Chapek’s tenure as CEO, which spanned nearly three years from 2020 to 2022, as CNBC documented in September. Chapek declined to comment on anything aside from ESPN’s future for the CNBC documentary.

While Chapek said he disagreed with the need to rent a partner for strategic reasons, he acknowledged that Disney could achieve this to boost money to pay for Comcast’s one-third stake in Hulu, which Disney has committed to purchasing for at the very least $8.6 billion.

“Hearst already has one strategic minority partner. This would therefore mean hiring a second strategic minority partner,” Chapek said. “Obviously the benefit of this is that you make some cash available. “Given some of the discussions that have taken place between Comcast and Disney about the need to purchase the last share of Hulu to make it wholly owned by Disney, it is possible that this is the cash they are after.”

Chapek also discussed the vision he had as CEO of turning ESPN into a centralized hub directing consumers to where the game is being streamed, regardless of which company owns the rights to broadcast it – a concept first reported by CNBC in March 2023

“If I’m on Apple TV and I want to watch a movie, I have no idea if it’s available on Prime, Netflix, Disney+, Hulu, or wherever,” Chapek said. “The way I find out about it is I go to my Apple TV, plug in the movie I want to watch, and they direct me exactly where the movie is. They then connect me seamlessly without me having to leave and go to another app to find a show within that app. I think ESPN should be a source for the central clearing house.

Adding comprehensive navigation could help ESPN become the first place sports fans go when they want to watch a game, even if Disney doesn’t have the rights to certain sports, Chapek said.

“How do you become indispensable to the sports viewer so that they stick with you as you move into the world of streaming? “I think solving this problem would be a great way to do that,” Chapek said.

WATCH: Bob Chapek discusses the long run of ESPN