The Walt Disney Company is evaluating its traditional broadcast and cable television business as it cuts down on costs and refocuses the future of its company toward direct-to-consumer streaming services.
During an appearance on CNBC Thursday morning, Disney CEO Bob Iger said the traditional television business “may not be core to Disney” and suggested the company might be open to offloading its broadcast and cable networks.
Nearly all of Disney’s broadcast and cable networks were acquired through various transactions over the last few decades. The company acquired the ABC broadcast network and eight local ABC stations through its merger with Capital Cities in the mid-1990s, and acquired Fox’s entertainment cable networks — FX, FXX, FXM and National Geographic — several years ago.
The company also operates ESPN as a joint venture with Hearst Corporation, with Disney owning a controlling 80 percent share in the sports-centric network.
Like other media companies, Disney has faced challenges in its linear television business, owed in large part to a weakened advertising sector that has seen marketing dollars shift from broadcast and cable toward streaming video and connected TV platforms. Disney operates three streaming services — Disney Plus, Hulu and ESPN Plus — each of which has ad-supported tiers, but the company has not seen much of a return on its investment in those products.
Cord-cutting has also impacted the traditional television business as consumers move away from expensive cable and satellite products toward cheaper online services. Still, Disney’s broadcast and cable networks are a profitable part of its business, with the company reporting a profit of $1.828 billion on revenue of $6.625 billion during the first three months of 2023.
The income from its traditional television networks helped offset losses in its streaming sector. In May, Disney said it lost $659 million on its core streaming products, despite pulling in $5.514 billion in revenue. Disney blamed a number of factors, including outsized content spending and some subscriber churn, for its streaming problems.
Earlier this year, Disney began laying off thousands of workers as part of a multi-prong strategy to reign in costs. Around 7,000 employees received pink slips by June.
Disclosure: The author of this story worked for the Disney-ABC Television Group in 2011.