Disney plots future of its traditional TV networks

Disney is examining whether its future should include fewer television networks after CEO Bob Iger said last summer that some of Disney’s TV networks might not be core to the company.

Disney is examining whether its future should include fewer television networks.

After Chief Executive Bob Iger said last summer that some of Disney’s TV networks, which include ABC, FX and National Geographic, might not be core to the company, executives set out to determine which channels have long-term value and which are expendable. 

DISNEY CEO BOB IGER SAYS COMPANY IS LOOKING TO CUT COSTS BY $7.5 BILLION

As part of the review, the company has explored potential sales and discussed putting some of its TV networks into A+E Networks, its joint venture with Hearst, according to people familiar with the matter.

Disney’s traditional TV networks were once cash cows but are suffering from viewership declines as streaming replaces the cable bundle. The company is exploring whether it can cut staff, programming and marketing costs enough to retain all of its TV networks. 

Its stable of TV networks includes ABC—which airs hits such as "The Golden Bachelor"—and eight local television stations, the Disney Channel, Freeform, National Geographic and FX, home to the American Horror Story franchise. 

So far, the executives’ work has identified ABC, Disney Channel and FX as the channels with the most value to Disney, people involved in the process said, because they all produce content that is popular on Disney’s streaming platforms Disney+ and Hulu. Other assets including cable networks Freeform and the National Geographic channel are less critical to Disney’s future, the review found.

Disney’s review of its traditional TV assets has identified opportunities to cut costs and improve the business, Iger said on CNBC Wednesday, suggesting it might not unload assets. 

"We have been considering various strategic options for each of our networks, not necessarily all together, but each of them," he said. "You have to look at the business in terms of its strategic value to the company, too, not only its financial value."

Disney Entertainment Co-Chairman Dana Walden orchestrated the review, which is being captained by top lieutenant Debra O’Connell, president of networks and television business operations. O’Connell has scrutinized operations across networks and the ABC local stations seeking cost savings and greater efficiency, people familiar with the effort said. 

DISNEY NAMES VETERAN PEPSICO EXEC NEW CFO

Some of Disney’s recent moves underscore those findings. When Disney forged a new distribution agreement with Charter Communications, it agreed to let the pay-TV company drop channels, including Freeform, Disney XD and FXX.

Among the options Disney has discussed internally is potentially folding certain channels into the existing joint venture with Hearst. It has considered the move in the past, including before Iger rejoined Disney late last year, and the TV review reignited those discussions. 

FOR DISNEY, ESPN'S NEXT PLAY NOT SO EASY

Combining some Disney networks with A+E’s lineup of channels, such as the History Channel and Lifetime, could help the joint venture forge better deals with cable companies and advertisers. 

In addition to that joint ownership of A+E Networks, Hearst has a minority stake in Disney’s flagship sports channel, ESPN, which Iger called one of the building blocks of the company’s future.

DISNEY WORLD MONORAIL PASSENGERS EVACUATED AFTER 'LOUD BANG,' 'FLASH OF LIGHT'

Disney is separately seeking a strategic partner for ESPN and has had discussions with leagues including the National Basketball Association and National Football League among others. The company is also working to transition ESPN to a streaming future.

Excluding ESPN, Disney’s traditional TV networks saw revenue fall 9.1% for the September quarter to $2.62 billion. Operating income from the networks was flat at $805 million during the period.

GET FOX BUSINESS ON THE GO BY CLICKING HERE 

Data & News supplied by www.cloudquote.io
Stock quotes supplied by Barchart
Quotes delayed at least 20 minutes.
By accessing this page, you agree to the following
Privacy Policy and Terms and Conditions.