‘A better understanding’ reached after Disney CEO Bob Chapek outlines plans to use ESPN as growth engine
Activist investor Dan Loeb signaled Sunday morning on Twitter that he is backing off his push to persuade Walt Disney Co. to spin off its popular sports television network ESPN.
The change of heart comes after Disney’s DIS, +2.54% Chief Executive Bob Chapek said in media interviews at this weekend’s D23 Expo event — an annual gathering of Disney fans where the company announces new shows and films — that he has plans for ESPN to be a big growth engine and a large part of the company’s entertainment offerings.
“As Bob has said, ESPN is an integral part of The Walt Disney Company, and he believes that its full potential will continue to be realized as we execute against our strategic vision for the most trusted brand in sports,” said Disney spokeswoman Kristina Schake on Sunday.
Last month, Loeb’s hedge fund Third Point LLC announced that it had renewed its stake in Disney stock after having liquidated one earlier this year. He sent a letter to Chapek asking for major changes to Disney’s business, including spinning off ESPN, refreshing Disney’s board and cutting spending.
“We have a better understanding of ESPN’s potential as a stand-alone business and another vertical for [Disney] to reach a global audience to generate ad and subscriber revenues,” Loeb wrote on Twitter Sunday morning. “We look forward to seeing [ESPN chief James] Pitaro execute on the growth and innovation plans, generating considerable synergies as part of The Walt Disney company.”