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Disney Should Spin Off ESPN And Merge Hulu Into Disney+, Activist Investor Daniel Loeb Urges CEO Bob Chapek

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In a letter to Disney CEO Bob Chapek, activist investor Daniel Loeb urged the exec to spin off ESPN and integrate Hulu into Disney+, among other changes.The set of recommendations came as Loeb’s Third Point hedge fund revealed a new stake in Disney.Loeb, who has put media companies in his crosshairs the past, famously tangling with Sony and engaging in a back-and-forth with George Clooney, also called for cost cuts and an expansion of Disney’s board of directors.

Third Point had a position in Disney from 2020 to earlier this year, and today’s letter is accompanied by a “repurchased” stake.“ESPN would have greater flexibility to pursue business initiatives that may be more difficult as part of Disney, such as sports betting,” Loeb explained in the letter. “We believe that most arrangements between the two companies can be replicated contractually, in the way eBay spun PayPal while continuing to utilize the product to process payments.”On the streaming front, Comcast is slated to sell its 33% stake in Hulu to Disney in 2024, but Loeb called for Disney to make “every attempt” to swing a deal sooner.

The company took full operational control of Hulu in 2019, but Comcast has retained a financial stake, which has kept Hulu limited in terms of expansion outside the U.S.

or other moves to stimulate growth.“We believe that it would even be prudent for Disney to pay a modest premium to accelerate the integration,” Loeb wrote. “We know this is a priority for you and hope there is a deal to be had before Comcast is contractually obligated to do so in about 18 months.”Buying out Comcast would enable Disney to merge Hulu into Disney+, a move that has been long anticipated by media investors and streaming specialists.“We believe that

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