Loeb reverses course as he pushes Disney to launch ESPN

Dan Loeb

Justin Solomon | CNBC

Activist investor Dan Loeb said he’s stepping back from his push to get Disney to leave ESPN, reversing a position he pushed less than a month ago.

In a tweet Sunday morning, the CEO of Third Point said he sees the virtue of keeping the sports network as a separate vertical within the Disney group.

“We have a better understanding of @espn’s potential as an independent business and another vertical of $DIS in reaching a global audience to generate ad and subscriber revenue,” said Loeb. .

“We look forward to seeing Mr. Pitaro execute on his growth and innovation plans, creating significant synergies as part of the Walt Disney Company,” he added, referring to Disney President James Pitaro.

This tweet follows comment from Disney CEO Bob Chapek, who told journalists at Expo D23 this weekend that he has big plans for ESPN, though he did not disclose details. details. Chapek told Variety that “we had no less than 100 inquiries from people interested in buying” ESPN when it was reported that it was likely to be sold.

“What does that tell you? That says we’ve got something really good,” he said. “And if you have a strategic plan, a vision of where it fits into the company over the next 100 years, then you don’t exactly want to divest from it. And we have that plan. We do. didn’t share that plan.”

Loeb’s reversal came after he bought new shares of Disney in the second quarter for about $1 billion, or 0.4% of the company’s shares. Disney shares have risen about 6.5% over the past month. Loeb left his previous position in the company as shares fell due to rising interest rates.

At the heart of the push to break away from ESPN is the belief that the new business can expand into areas including sports betting. He compares it to eBay spinoff of PayPal “while continuing to use the product to process payments.”

Along with the ESPN issue, Loeb urged Disney to bring streaming giant Hulu to the Disney+ platform directly to consumers. Parent company NBC Universal Comcast has an agreement to sell its 33% stake in Hulu to Disney over two years. Loeb recommended that Disney “do its best” to get the remaining minority shares before the sale deadline.

“We believe Disney will even have to pay a modest premium to speed up the integration process,” Loeb said in a letter. “We know this is a priority for you and hope to have an agreement before Comcast is obligated to do so in about 18 months.”

CNBC has reached out to Disney for comment.

Disclosure: CNBC is part of Comcast’s NBCUniversal.

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