It Is Expensive Selling To Consumers. Just Ask Disney CEO Bob Iger.

It Is Expensive Selling To Consumers. Just Ask Disney CEO Bob Iger.

There was a time when it seemed that content producers believed that the answer to generating revenue was to go direct-to-consumer via a proprietary streaming platform and to do so without a distribution partner. That is a very expensive proposition.

For example, the WWE (ticker: WWE), launched its 24/7 streaming network – WWE Network – in February 2014. Seven years later in January 2021 the WWE migrated the WWE Network to Comcast’s (ticker: CMCSA), streaming platform – Peacock – which paid approximately $1 billion for the right to exclusively broadcast the WWE Network over a 5-year period. The WWE learned that it is expensive to go direct to consumer while absorbing 100% of the financial burden in that pursuit. The WWE of course recently announced its plan to sell itself to Ari Emanuel’s Endeavor (ticker: EDR) in a deal that is expected to close around year-end.

Disney (ticker: DIS), CEO Bob Iger has learned that selling direct to consumers is awfully expensive. Disney is now looking for a partner to help with sports / ESPN distribution. My view is that this is a first step toward selling the Walt Disney Company.

  • Put Amazon (ticker: AMZN), on your list of potential distribution partners for Disney. For years Amazon has distributed third-party content on Amazon Prime including channels from WarnerBros Discovery (ticker: WBD) and Paramount (ticker: PARA). Amazon broadcasts NFL games, Major Leage Baseball, tennis and more.
  • YouTube / Google (ticker: GOOGL), also deserves to be on the list given that it recently paid $14 billion for the right to exclusively broadcast NFL Sunday Ticket.
  • ESPN is the type of brand that Apple (ticker: AAPL), would like to be involved with in my view. Apple is already in sports in a big way with soccer / European football. If Steve Jobs was alive today I am convinced that Apple would own Disney. Jobs and Iger did the Pixel deal together and they would have figured it out. Tim Cook has had the opportunity to acquire Disney, perhaps a distribution deal with ESPN will help the non-imaginative Tim Cook get comfortable with the idea of acquiring Disney before Bob Iger’s term is up at year-end 2026

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