What Will Bob Iger Do Next? is a weekly game show popular in Hollywood.

Power brokers in the U.S. media and entertainment sector are concocting scenarios about the future and the potential dissolution of the sector’s most dominant corporation from Culver City to New York City.

Iger, the chief executive of Walt Disney (DIS.N), who joined the company for a second time in November, sparked a flurry of industry discussion in mid-July when he said during a CNBC interview that the company’s television operations, including its stations and cable channels, “may not be core to Disney.”

His comments sparked a flurry of activity among bankers and private equity firms, who started deciding if they should “make a move,” one banker, speaking on the condition of anonymity, told Reuters.

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The banker claimed that “he is signaling to investors.” It causes people to reflect.

During Disney’s third-quarter results call with investors last week, Iger said the firm is considering strategic partnerships for its flagship sports brand, ESPN, and had received “notable interest,” albeit Disney intended to maintain control. This stoked speculation.

The company’s film studios, theme parks, and streaming video are the three divisions that will generate the most growth over the following five years, according to him.

One prominent media executive envisioned Iger separating Disney’s cable networks like Disney Channel or FX, local TV stations, and the ABC broadcast network into a new firm and funding it with the right amount of debt.

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By 2024, according to a seasoned media executive, Disney will spin off the television asset to its stockholders as a distinct, publicly traded company, with private equity perhaps playing a role.

A fourth media executive, who has operated both traditional and digital media businesses, suggested that Disney could need to find outside investors for ESPN in order for it to compete for increasingly expensive sports media rights, such as those for NBA games, which expire after the 2024–25 season. These rights are becoming more and more expensive.

That might free up funds for Disney to buy NBCUniversal’s share in Hulu and seize full control of the streaming service the following year. In accordance with a 2019 agreement, Comcast, the parent company of NBCUniversal (CMCSA.O), can demand that Disney purchase the Hulu interest or that NBCUniversal sell it, as early as January 2024, at a market value of at least $5.8 billion.

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According to the fourth executive and other senior media people who talked with Reuters, Iger is probably putting together options, keeping control of ESPN with the potential to sell it in the future to make Disney a more appealing acquisition prospect.

The senior executive compared the approach to the one used by former Time Warner CEO Jeff Bewkes, who sold off portions of the media conglomerate’s operations before selling its main film and television division to AT&T in a $85.4 billion deal that finished in 2018.

“You sell the parts, then you sell what’s left,” the veteran advised. That is the complete Bewkes.

These executives hypothesized that Iger’s final goal would very well be that. Iger would need to strip Disney down to just the parts that preserve its global intellectual property portfolio, while separating out its cash-generating legacy businesses like TV, in order to make it appealing for the only likely buyers big enough to digest a Disney – Apple (AAPL.O) or Alphabet’s (GOOGL.O) Google.

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The executive used the acronym FAANG, which stands for Facebook (now Meta), Apple, Amazon (AMZN.O), Netflix (NFLX.O), and Google, to refer to the five major U.S. technology companies. “There’s no way an FAANG company is going to buy his company when he has all these cable channels, a broadcast network, and a cable sports network,” the executive said. It’s not their line of work, and I doubt the government would ever approve of it.

According to a source with knowledge of the situation, Amazon would probably not be interested in such a purchase after purchasing MGM for $8.5 billion last year. Furthermore, it is believed that Facebook has little interest in traditional media holdings.

According to a March article by Needham and Co analyst Laura Martin, the combination of excellent content and robust distribution would increase value and appeal to investors if Apple acquired Disney. In Hollywood, talk of this concept is still going on.

When questioned about the potential on the investor call, Iger responded, “Obviously, anyone who wants to speculate about these things would have to immediately consider the global regulatory environment.” “I won’t say anything else. Simply put, we don’t worry excessively about it.

He might be by himself in that.


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