ESPN, facing headwinds, might still reverse its slide
NEW YORK — Two years ago, Disney CEO Bob Iger acknowledged that ESPN, long a major profit center for Disney, was shedding subscribers. On Tuesday, Disney announced a plan intended to start bolstering ESPN’s fortunes.
For starters, the sports service will now launch a streaming sports service in early 2018, Disney said. The service, to be delivered through the ESPN app, will offer baseball, hockey, soccer and tennis matches, as well as college sports.
Notably, ESPN will not be streaming pro football or basketball, at least initially.
Disney is also buying a majority stake in streaming service BAMTech for $1.6 billion. That ups Disney’s ownership to 75 percent, from 33 percent. The service was started by Major League Baseball, which remains a minority owner along with the National Hockey League.
Disney had always described its BAMTech investment as key to developing new streaming services for ESPN and other parts of Disney.
Investors have been concerned about ESPN’s prospects for a while. Their big fear: ESPN might be facing long-term decline as more people quit cable or choose cheaper bundles without sports.
Over time, that could kick off a death spiral in which fewer subscribers mean less money for ESPN to use in bidding for sports rights; fewer games to air would then give more subscribers reason to quit.
But optimists believe ESPN has the clout to strike better deals with cable and satellite-TV companies, in essence allowing it raise prices and to enlist their help in signing up more households for its premium cable service.