ESPN chairman Jimmy Pitaro downplays potential spinoff from Disney

As Disney prepares to introduce Josh D’Amaro as its new CEO next month, rumors about the company’s plans for ESPN have taken center stage.

D’Amaro, who will replace longtime Disney CEO Bob Iger, worked his way up through the company’s experiences division that oversees Disney’s parks and cruises. That portion of the business has become the cash cow for Disney in recent years, earning about $10 billion in operating income last year, per the company’s recent earnings report. Meanwhile, ESPN has proven to be a shrinking portion of Disney’s overall business.

The Worldwide Leader in Sports was once the powerhouse fueling Disney by raking in billions of dollars in carriage fees from over 100 million pay TV households throughout the country. Now, that number has cratered to about 65 million homes. All the while, the cost of live sports rights continue to increase, and streaming has yet to replicate the lucrative economics of the cable bundle.

The confluence of factors has led to speculation that Disney might want to spinoff ESPN under D’Amaro. But according to ESPN chairman Jimmy Pitaro, it’s only speculation. In a recent interview with CNBC, Pitaro pushed back on the idea that ESPN could separate from Disney under D’Amaro’s leadership.

“I believe that ESPN is a big part of the Walt Disney Company’s strategy and future,” Pitaro said, per SBJ. He noted that people have floated an ESPN spinoff since “the day I started at ESPN eight years ago.”

The ESPN chair also discussed D’Amaro’s passion for sports as being a reason why the network is likely to stay under the Disney umbrella. “He is a huge sports fan. We are very much aligned in terms of the future of ESPN. … He very much understands the power of live sports. We all understand the power of live sports at Disney. Josh especially gets it, and so we’re very pleased,” Pitaro said.

Of course, it’s one thing to be on board with ESPN in theory. But D’Amaro will have to assess whether ESPN is a valuable asset for Disney from a business standpoint first and foremost. He’ll have to believe that ESPN can alter its trajectory from a diminishing asset to a growth (or at least relatively stable) business.

For what it’s worth, CNBC reported last week that Disney isn’t planning to spinoff ESPN “anytime soon.”

But many would argue that an ESPN spinoff is a matter of when not if, though a CEO that looks upon ESPN favorably could keep it under Disney’s purview for longer than other are anticipating. As for Jimmy Pitaro, he’s not going to let those talks effect how he operates the business.

“My job is to keep my head down, focus on our strategy, focus on our roadmap, make sure that our people at ESPN are engaged, and that is what we are doing today.”