A scene from the FX series Shogun.
Source: Disney | FX
disney The math has been made on spinning off the TV network business, but it looks too confusing — at least for now.
The company’s chief financial officer, Hugh Johnston, told CNBC on Thursday that “scream boxGiven the “complexity of operations,” the “costs may outweigh the benefits” in spinning off its TV network business.
The future of traditional television network business has always been the focus of the media industry. late October, Comcast Executives said they Exploring the Separation of Cable Network Businesses. Executives said the process is in its early stages and the outcome is unclear.
Although the cable news package remains a cash cow for businesses, it is rapidly losing customers. Analyst firm MoffettNathanson estimates that the industry overall lost 4 million traditional pay-TV subscribers in the first six months of this year.
Disney reports Thursday Revenue from its traditional TV networks fell 6% to $2.46 billion in the most recent quarter, while profits from the division fell 38% to $498 million.
Its apparent commitment to this area appears to have shifted.
Last summer CEO Bob Iger Doors open for sale of TV assets. Iger recently returned as CEO, undergoing a massive restructuring of the company and facing pressure from an activist investor.
Johnston said on an earnings call Thursday that he began evaluating divestitures shortly after joining Disney a year ago. He noted that after “playing with spreadsheets,” there is no clear path to value creation after spinning off networking or other businesses.
“I like the portfolio right now. I wouldn’t change anything,” Johnston said Thursday on CNBC.
Similarly, Fox Corporation Chief Executive Lachlan Murdoch noted earlier this month the complexity of spinning off the company’s cable network – even though its network is much smaller than its peers.
“From my perspective, I don’t know how we can do that. I think it’s going to be very difficult from a cost perspective and from a revenue and promotional synergy perspective to spin off parts of the business,” Murdoch said. Fox said on its earnings call.
Warner Bros. Discovery CEO David Zaslav noted on the company’s earnings call last week that despite the challenges of bundling, it “remains an extremely important part of our business.” He added that it is a “core tool for delivering the WBD story”.
Iger echoed those comments Thursday, touting content derived from the traditional TV business and its integration with streaming, which remains front and center for Disney.
Iger highlighted Disney’s get Fox’s entertainment assets in 2019 were primarily about providing content to help drive its streaming business. Activist investor Nelson Peltz slam The deal took place last year and it said it resulted in a loss of shareholder value.
“We specifically mentioned that we’re doing this through a streaming lens, and we see a world where streaming is going to proliferate and we know we need not only more content, but more content,” Iger said Thursday. Much distribution.”
He pointed out 60 Emmy Awards Disney’s content acquisitions this year include FX’s “Shogun,” “Bear” and “Fargo,” which also appear on Hulu.
Disclosure: Comcast owns NBCUniversal (parent company of CNBC) and is a co-owner of Hulu.
