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Disney CEO discusses Hulu within Disney+ and ESPN’s sports-gambling plans

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By Jon Swartz

Walt Disney Co. executives are considering making Hulu available through Disney+ and see sports betting as one reason to keep ESPN around, Chief Executive Bob Chapek said Wednesday.

Those were among several long-suspected, newsy tidbits from Disney’s /zigman2/quotes/203410047/composite DIS -0.30% CEO during a wide-ranging interview at the Goldman Sachs Communacopia & Technology conference in San Francisco late Wednesday. As Disney celebrates its 100th anniversary in 2023, flagship streaming service Disney+ will play a central role in the company’s direct-to-consumer plans, according to Chapek.

Hulu is still partly owned by Comcast Corp. /zigman2/quotes/209472081/composite CMCSA -0.99% , after Disney bought out AT&T Inc.’s /zigman2/quotes/203165245/composite T +0.82% equity in the streaming service, but Comcast-owned NBCUniversal has already ended its content partnership with Hulu in favor of its own streaming service, Peacock . Once Disney gains full control of the streaming service as early as 2024 , Hulu is expected to be “hard bundled” with Disney+, similar to Disney’s overseas streaming efforts with some of the same content, and Chapek said “2024 isn’t far away” when discussing that pairing Wednesday, while suggesting he would like to see it happen earlier.

“We would love to get to the endpoint earlier, but that obviously takes some level of propensity for the other party to have reasonable terms for us to get there … If we could get there, I would be more than happy to try to facilitate that,” he said.

The company’s goal of reaching 135 million to 165 million Disney+ subscribers by the end of fiscal 2024 will be determined in great part by its ad-supported service that debuts Dec. 8 in the U.S. The new service, he added, will be “operating margin neutral at worst” compared with the full-price version.

When asked whether ESPN+ could also be part of that bundle, Chapek downplayed the possibility without ruling it out entirely. After an activist investor sought a spinoff of ESPN earlier this year , Chapek called ESPN a “good long-term bet,” partly because of sports gambling. On Wednesday, Chapek said he has no interest in selling ESPN. 

Chapek said Disney has been studying the addition of sports gambling to ESPN. “Our data is undeniable” that linking out to a licensed sports-gambling site “would have no impact on brand equity for Disney but would have a positive impact on brand equity for ESPN because our younger audience is demanding that,” he said.

Disney is counting on sports outside of the U.S. as well. Chapek touched on Disney’s success in India, calling the battle for Indian Premier League rights “frothy,” and saying “We’re hoping [consumers] come for cricket but stay for Disney,” 

A reported plan for membership service that includes streaming, parks and shopping would provide a “universal guest experience” combining the company’s physical and digital offerings, Chapek said. “What you watch on Disney+ could have an impact on your experience at the park,” he said.

/zigman2/quotes/203410047/composite
US : U.S.: NYSE
$ 92.01
-0.28 -0.30%
Volume: 3.58M
Dec. 7, 2022 11:36a
P/E Ratio
53.41
Dividend Yield
0.00%
Market Cap
$168.30 billion
Rev. per Employee
$375,364
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/zigman2/quotes/209472081/composite
US : U.S.: Nasdaq
$ 34.43
-0.34 -0.99%
Volume: 4.90M
Dec. 7, 2022 11:36a
P/E Ratio
29.95
Dividend Yield
3.14%
Market Cap
$150.32 billion
Rev. per Employee
$641,328
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/zigman2/quotes/203165245/composite
US : U.S.: NYSE
$ 19.33
+0.16 +0.82%
Volume: 13.82M
Dec. 7, 2022 11:36a
P/E Ratio
7.17
Dividend Yield
5.74%
Market Cap
$136.62 billion
Rev. per Employee
$683,493
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