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BFD Expert Voices - Media Deals

BFD Expert Voices

Disney CEO Bob Iger changed his tune just a bit yesterday when asked about the future of the company's linear TV business. 

Why it matters: Any sale of that business would be worth billions of dollars and attract a broad range of suitors. 

Details: Iger sat down with CNBC's Julia Boorstin after Disney issued earnings, and he covered a lot of ground when it comes to the various deals the company has on its plate. 

One takeaway from the interview was Iger backing away, a bit, from the stance he appeared to be taking in July that the linear TV business was, basically, on the auction block.

Iger told CNBC's David Faber in that interview that the linear unit "may not be core" and that the company is going to "look expansively" for opportunities there. Wall Street and the media (Axios included) read that as a for-sale sign on that division. 

Yes, but: Iger appeared to back a bit away from that interpretation in his interview with Boorstin.

She brought up the July interview and reminded Iger that he said at the time that he was exploring the sale of linear TV, and the CEO pushed back slightly. His initial response was clarifying that he basically said anything was on the table regarding that business, adding that "we do this a matter of course for all of our assets."

Then he implied that after a close look over the last few months, whatever sale intention that was present in July had eased off a little.

"We've uncovered a number of really interesting opportunities to reduce costs and improve the business, and in fact, you have to look at the business in terms of its strategic value to the company, too, not only its financial value. And by the way, it is profitable still for the company, but it provides a lot of strategic support for ESPN."

Zoom in: Iger listed the ways in which that support can occur with ESPN and noted that ABC itself has a lot of sports content.

Be smart: Don't be took quick to think that Disney's linear TV business is the subject of banker decks and slide presentations being sent to suitors. Iger finished off the question with this:

"So we are looking in an open-minded way, but that shouldn't in any way suggest that anything is imminent, and it should suggest that as part of the ongoing process we are very, very realistic about the marketplace and the future of those assets, but we also are very mindful of the value to the company today and possibly into the future."

Disney's Iger downplays possible linear TV sale

1 big thing: Iger shows a bit of linear love

Iger touched on a few more deal-related topics in the interview, specifically Disney's search for ESPN partners, its recent deal to buy out Comcast's Hulu stake, and the investor thorn in the CEO's side.

Why it's the BFD: Disney's ability to manage the strategic moves it has in place is critical to reviving its struggling stock price. 

Details: Regarding ESPN, Iger said that "we obviously are planning to take the direct-to-consumer basis, and we feel great about that.

"We believe we have the opportunity to strengthen that hand even more by bringing in one or two strategic partners that can add marketing support and technology support or possibly content support.

"We've been in discussions with a number of entities, and we don't have anything specific to tell you right now and you can expect us to elaborate more in the near future."

Amazon, YouTube and Apple are sensible partners for ESPN, according to one veteran media banker. Pro sports leagues have been mentioned as well.

Zoom in: Iger acknowledged the $8.6 billion check Disney is about to write to Comcast for its Hulu stake, a payment the CEO called a "floor price." That characterization nods to the likelihood that an appraisal process may decide that the value of the stake is even greater.

Iger said he expected the process "would be fair and objective."

Meanwhile, he noted that he'd had a call with Nelson Peltz, the co-founder of Trian and now one of the company's largest investors, who is agitating for changes at the company and for board seats.

Clearly he didn't want to talk much about it, saying that even with a call from Peltz, Iger doesn't have specifics on what the investor will ask for.

Disney continues hunt for ESPN partner

2. The BFD: Finding an ESPN partner 

Want more media deals? Check out the Axios Pro Deals Tracker beta.

• Ozone, an SF-based collaborative video editor, raised $7.1m in seed funding from YC, NEA, General Catalyst, LGVP, Bluewatch Ventures, Polymath Capital Partners, Pioneer Fund, SOMA Capital and Olive Tree Capital. https://axios.link/3QnehG4

• Eilla AI, a London-based generative AI platform for M&A, VC and PE research and document creation, raised $1.5m in seed funding. Eleven Ventures led and was joined by Fuel Ventures. https://axios.link/3u8jmea

• Luminous Group, a Newcastle, U.K.-based company that provides immersive training programs for extended reality software, raised £1m in funding led by North East Venture Fund. https://axios.link/3QuyolV

• Flutter Entertainment, the Irish owner of FanDuel, said it plans to list on the NYSE in Q1 2023 and delist from the Euronext Dublin exchange. It plans to maintain its London listing. https://axios.link/3SGg7oe

3. Deal flow

• Abbey Klaassen was named U.S. CEO of Dentsu Creative, succeeding Paulo Fogaca. https://axios.link/3MCQxgl

• Adam Ciongoli, EVP and general counsel for Campbell Soup Co., was named chief legal and policy officer of Fox Corp., succeeding Viet Dinh. https://axios.link/46ZSGL4

• Sameer Balgi was hired as CFO of Fox's Tubi. https://axios.link/3uaO1Yf

• Alison Levin, formerly head of global media revenue at Roku, will join NBCUniversal as president of advertising and partnerships. Karen Kovacs was promoted to NBCU's president of client partnerships. https://axios.link/49ucwzW

• Kate Oates was named head of drama productions at BBC Studios following the exit of Priscilla Parish. https://axios.link/47IZVHt

• Amazon is cutting jobs in its music division, targeting Amazon Music's editorial and audio content team. https://axios.link/3MwdaCP

• Dish Network is laying off more than 500 employees. https://axios.link/3MBd7WK

• G/O Media is laying off 23 editorial staffers and closing Jezebel, which Axios previously reported had been for sale. Editorial director Merrill Brown has exited. https://axios.link/465Nlk7

4. Movin' on up (or out)

🤖 News media advocate: Pay publishers when their content trains AI (Axios)

News/Media Alliance president and CEO Danielle Coffey "rebutted the argument that, in the absence of traditional journalism, AI companies can easily turn to 'citizen journalism' to train their algorithms," Maria Curi writes. 

📻 SiriusXM lowers price, reboots to take on streaming music rivals with "human-curated" focus (THR)

"Among the biggest changes is a new price: $9.99 per month for the all-access streaming service, a price that is $1 cheaper than before, and also undercuts streaming services like Spotify and Apple Music, which have adopted the $10.99 price point," Alex Weprin writes.

👀 YouTube pages are getting a TikTok-like For You feed (The Verge)

"It will start showing up on November 20th, according to a post from YouTube's support account, which says the section will recommend 'a mix of content from your channel to viewers based on their watch history,'" Wes Davis writes. 

5. Channel surfing

Illustration of a TV color test screen in the shape of a wave.

Nov. 6 — College basketball season began on Monday, and there is arguably more intrigue on the women's side of the court this year than the men's, Tim wrote.

Why it matters: The growth of women's sports will be tested by how this year's women's basketball season can follow up last year's record-breaking run, which comes as the NCAA considers whether it should sell those rights separately.

Nov. 7 — Relo Metrics, a subsidiary of ad intelligence company GumGum that specializes in tracking sponsorships in sports, is raising a Series B Plus, CEO Jay Prasad told Kerry.

Why it matters: As consumers stay hooked to live sports across broadcast, streaming platforms and social media, sports tech companies supporting the sector have intrigued investors.

Nov. 8 — Social media startups are seeking to seize an opportunity to compete with X. It started after Elon Musk's Twitter (now X) takeover last year, and although the desire to take social share remains, whether they can make a dent remains a big question.

Why it matters: A viable winner could make life difficult for X at a time when issues are steadily stacking up against it, Kerry wrote.

6. 🗞️ Catch up quick

🗓️ Programming note: We're off tomorrow for Veterans Day. Be back in your inboxes Monday. 

🎥 Situational awareness: The 118-day strike by Hollywood actors ended this morning after SAG-AFTRA reached a tentative deal with the studios. 

Now the scramble to restart productions begins, Tim writes.

@tim_bays: "The Good, The Bad & The Groundlings" at The Groundlings Theatre in L.A. A dirty little secret: This is often funnier than most episodes of "Saturday Night Live." 

@kerrymflynn: "Oscar's Handmade Halloween" on Max. My nieces love "Sesame Street" and introduced me to this adorable dog-themed special. 

✏️ Thanks to Michael Flaherty for editing and Brad Bonhall for copy editing this newsletter.

Thank you for reading Axios Pro Media Deals! Please ask your friends, colleagues and SAG-AFTRA members to sign up.

November 09, 2023

1 big thing: Iger shows a bit of linear love