Third Point Investment Advisors, headed by Daniel Loeb as CEO, has purchased a new stake at The Walt Disney Company. CNBC reports. The news comes after the outlet obtained a letter to investors announcing Loeb and Third Point’s new position.
Following the news, Disney’ share price has risen 1.3%.
Disney has just completed a strong quarter, with its total direct-to consumer footprint exceeding 221 million subscribers. Strong demand in the United States for theme parks led to revenue exceeding expectations. Loeb wrote to Bob Chapek, Disney CEO, and urged for some changes. “every attempt” to acquire Comcast’s minority stake in Hulu prior the upcoming deadline in 2024.
“We believe that it would even be prudent for Disney to pay a modest premium to accelerate the integration,”Loeb wrote the letter. “We know this is a priority for you and hope there is a deal to be had before Comcast is contractually obligated to do so in about 18 months.”
Hulu is owned by Disney at 67% and Comcast at 33%. Disney has agreed to buy out Comcast’s share of the streamer for a minimum of $5.8 billion by January 2024 if it hangs on to the streamer. Disney could acquire full ownership of Hulu to allow it to be integrated into its Disney+ streaming service.
One long-standing source of speculation concerning Disney’s core businesses has been sports cable network ESPN. Although linear customers have been leaving in recent years, streaming service ESPN+ is still a major component of the Disney Bundle (Disney+ and ESPN+, Hulu). In Loeb’s letter, he raises the possibility of spinning off the company into its own standalone business.
“ESPN would have greater flexibility to pursue business initiatives that may be more difficult as part of Disney, such as sports betting,”Loeb wrote. “We believe that most arrangements between the two companies can be replicated contractually, in the way eBay spun PayPal while continuing to utilize the product to process payments.”
Loeb was previously a shareholder in the company between 2020 and early 2022.
More to come…
