This story has been floating around the financial world for maybe a year. This is the deal:
- Not that long ago "everyone" had cable (or a dish). Every package had the ESPNs, and the competitors, whether they watched it or not.
- The price paid for ESPN is a whopping $8/month. Add in the other sports channels, including the very expensive regional sports networks (Bally Sports Ohio, etc) and "everyone" was paying nearly $20/month, just for sports channels.
- Now there is streaming. People that really don't like sports can get by with the estrogen soaked melodrama on things like Peacock or HBO Max.
That leaves far less than "everyone" now paying for ESPN, et al.
ESPN remains insanely profitable, right now, but the trend is clearly there.
Meanwhile, Disney lost a BILLION AND A HALF dollars just in the last quarter, on its streaming deal (ESPN Plus, Disney Plus, Hulu). Streaming may be one of those great entertainment ideas, that just cannot make any money. Almost all streamers bleed money like a stuck pig.
So what is Disney to do?
Just sell ESPN as a streaming service. Can't. It violates Disney's contracts with all the cable and dish companies. And, who would continue to pay for cable if they could get ESPN and the other channels they wanted "a la carte", so that just kills cable. And, most analysts think that a stand alone ESPN would have to charge about $50/month to just break even, based on the number of subscribers that actually watch sports.
So these analysts see ESPN as a future "toxic asset" and want Disney to get rid of it.
I don't see it happening. Nobody yet has figured out how to make money at streaming, and until they do, it is all just discussion.