Disney’s Chief Financial Officer, Hugh Johnston, has confirmed in a recent interview that the company has no near-term plan to alter its TV networks portfolio. His remarks were in response to the statement by CEO Bob Iger made more than a year ago during which he had suggested the possibility of shedding some linear TV assets held by Disney. This statement follows a period of industry-wide scrutiny over traditional TV networks, with companies like Comcast also exploring the separation of their cable networks.
Johnston explained that Disney has carefully evaluated the option of divesting its TV network business but concluded that the potential costs outweigh any possible benefits. “The operational complexity is significant, and the cost is probably more than the benefit,” he said, adding that the company has found no clear path to value creation through such a separation.
Despite year-after-year declines in traditional TV viewership, Disney’s stand on its network assets remains unflinching. For the most recent quarter, revenue from the Walt Disney Company’s traditional TV networks was down 6% compared to the same period last year, at $2.46 billion; profits fell 38%, to $498 million. However, Disney continues to prioritize its streaming strategy, leveraging content from its TV network business to strengthen its streaming platforms, especially Hulu.
The future of the cable TV bundle has been a topic of debate, with many traditional media companies grappling with subscriber losses in the Pay-TV sector. Disney’s commitment to its TV networks portfolio marks a contrast to some of its peers. For example, Fox Corp. CEO Lachlan Murdoch recently expressed doubts about the feasibility of separating its cable networks due to the operational and financial challenges involved.
Iger, who has championed the company’s broader streaming ambitions, reiterated the importance of Disney’s traditional TV assets, particularly in light of the content acquisition from the 2019 purchase of 21st Century Fox. He emphasized how this content continues to drive both streaming success and the company’s overall storytelling strategy, citing recent Emmy-winning shows like Shogun and Fargo. In conclusion, Disney appears committed to maintaining its current portfolio as it continues to navigate the evolving media landscape.