The Disney Asset Fire Sale May Have Already Begun

Activist investor Nelson Peltz sought a seat on Disney’s Board of Directors earlier this year. Eventually, he gave up his proxy battle when Disney CEO Bob Iger decided to eliminate 7,000 employees and save the company more than $5.5 billion in the process. That move seemed to appease Peltz for the time being, but now he has returned and owns a more significant stake in the Walt Disney Company. Peltz’s Trian Fund Management is seeking multiple seats on the Disney Board, including one for Peltz.

But this time, Iger may be unable to fire employees to appease Petlz, so there must be a new strategy. And hints of that new strategy may have already come to light.

Trian is known for “encouraging changes,” such as selling underperforming divisions. At Disney, that would be the over-the-air television networks. Rumors have been swirling that Disney has received a $10 billion offer for ABC and other networks and that ESPN will be heading to a streaming-only platform.

But while Disney is still deciding on selling its American assets, Bloomberg reports that a deal is in place for the Disney Company to sell a controlling stake in its Disney Star business to Reliance Industries, owned by one of Asia’s wealthiest men, Mukesh Ambani.

What is Disney Plus Hotstar?

For an American audience, it’s hard to explain the streaming service Disney Plus Hotstar. In India, it combines Disney Plus and Hulu with more live sporting events, including cricket. Last week, Disney Plus Hostar set a record for most viewers with 43 million for the cricket match between India and New Zealand in the 2023 Cricket World Cup.

But last year, it lost the Indian Premiere Cricket League to Reliance Industries. This caused a massive drop in subscribers and played a major part in Disney Plus losing four million subscribers last year. But cricket wasn’t the only thing Reliance could take away from Disney Plus in India. The company also struck a deal with Warner Brothers Discovery to air HBO’s content in India. That content had formerly been on Disney Plus.

According to Bloomberg, Disney is asking for $10 billion, while Reliance is said to be offering $7-$8 billion. The two sides should announce a deal early next month despite being a few billion apart. Disney would also hold a minority stake in Reliance, and the Indian company would receive Disney stock in the exchange.

What About Disney’s American Broadcast Channels?

Reports say that Disney is mulling a $10 billion offer for ABC, but no announcement is imminent. Disney is also seeking a partner to take a minority stake in ESPN.

ESPN has the streaming rights for nearly every American sports league, which makes it attractive to potential buyers. But with that comes massive expenses to pay for those sports rights. While Disney looks for a strategic partner, it must also consider taking ESPN to an online streaming-only service.

While there is potential for an ESPN streaming service that does not include an over-the-air option that would be costly for subscribers, it’s that uncertainty that may scare off a potential buyer.

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