The Walt Disney Company (DIS) is undertaking a strategic review of its traditional television network portfolio, considering the long-term value of each channel in the face of shifting consumer behaviors towards streaming. CEO Bob Iger's comments last summer about the potential non-essential status of some networks have led to a broad evaluation. This review involves discussions around potential sales and the possibility of moving certain networks into Disney's joint venture with Hearst, A+E Networks. As Disney assesses its traditional networks, channels like ABC, Disney Channel, and FX have been deemed valuable due to their content's popularity on streaming platforms like Disney+ and Hulu. Conversely, networks such as Freeform and the National Geographic channel may not be as critical to Disney’s future plans.
Disney's traditional TV networks, once significant revenue generators, are experiencing viewership declines. The company is exploring cost-cutting measures across staff, programming, and marketing to determine whether it can maintain its network lineup. ABC, with marquee shows like “The Golden Bachelor,” and FX, with its “American Horror Story” series, are among the channels identified as key assets. The review, led by Disney Entertainment Co-Chairman Dana Walden and Debra O’Connell, President of Networks and Television Business Operations, is focused on finding efficiencies and savings without necessarily divesting assets.
Recent operational decisions, such as Disney's distribution agreement with Charter Communications, which allowed for the dropping of channels like Freeform, reflect the review's findings. Discussions have also taken place about potentially merging some Disney networks with the A+E Networks lineup, which could strengthen negotiating positions with cable providers and advertisers. Beyond the joint venture, Hearst also holds a minority stake in ESPN, which Iger has highlighted as a cornerstone for Disney's future, especially as the company explores strategic partnerships and transitions ESPN towards a streaming-centric model.
Despite a 9.1% decline in revenue to $2.62 billion for Disney’s traditional TV networks (excluding ESPN) in the September quarter, the operating income remained steady at $805 million. The comprehensive review and potential restructuring come as Disney navigates the rapidly evolving media landscape and positions itself for future growth in the streaming era.
