Could an ESPN+ and Netflix Merger Solve Iger’s Streaming Woes?

It’s no secret that Disney CEO Bob Iger has shifted his focus to streaming.

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Throughout 2023, Iger referred to streaming (and the restructuring within the company to focus on streaming) as his number one priority. He believes that the answer to returning to the top of the pyramid of media giants lies within Disney+, ESPN+, and direct-to-consumer marketing within those platforms. It seems that investor Nelson Peltz seems to somewhat agree.

If you’re unfamiliar with Nelson Peltz, he’s the leader of the activist investment firm, Trian. Trian invests in companies that they think can be more efficient and successful, and Peltz has shown quite a bit of interest in Disney. He’s even tried to grab a seat on Disney’s Board of Directors.

©New York Times Nelson Peltz of Trian Partners

Peltz has recently shared his thoughts on how Iger should go about profiting from streaming, and making ESPN+ the preeminent sports streaming platform, which is one of Iger’s four stated building opportunities for 2024. According to Bloomberg, Peltz thinks that Disney should bundle ESPN+ with Netflix.

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According to anonymous people familiar with the situation, Peltz’s Trian group will soon publish a “white paper” detailing its investment thesis and financial recommendations for Disney after the Company’s first earnings call of 2024 — which will take place on February 7th. Peltz plans to share the recommendation with Disney then to bundle ESPN+ with Netflix.

©Netflix

Disney already has ESPN+ bundled with Disney+ and Hulu for a discounted cost, but Iger has shared that he’s interested in selling a stake in ESPN+ to a company that can help “broadly distribute a new direct-to-consumer version of the company’s main sports channel.” Peltz thinks this could be Netflix. This recommendation comes after Disney’s streaming services lost $2.5 billion in fiscal 2023, and Iger has deemed the ambitious task of profiting on streaming before Q4 of 2024 totally possible.

©Disney

According to Bloomberg’s anonymous sources, Trian will also argue that Disneys’ financial forecast to spend $60 billion on theme parks over the next decade are too “opaque,” management structure should be simplified to eliminate redundancy, and that Wall Street needs more details on Iger’s recent cost cuts.

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We’re interested to tune in to the Q1 earnings call on February 7th as well as Peltz’s white paper report. We’ll be sure to keep you all updated with more Disney news, so make sure to tune in so that you never miss a thing.