Disney Faces Dramatic Day, "Inaccurate" ESPN Selloff Reports Send Stock Soaring

Earlier today, it was reported by numerous news outlets that The Walt Disney Company was looking to spinoff one of its major subsidiaries, ESPN.

Related: ESPN Lays Off Hundreds of Employees as Disney Shifts Focus

The Worldwide Leader In Sports has been owned by the House of Mouse since Disney acquired ESPN’s parent company, ABC, in 1995.

Following today’s initial report, Disney stock skyrocketed, jumping as much as 3%. According to a New York Post report regarding the situation:

But shares of the Mouse Houses gave back some of their gains, closing the day up only 1.2 percent, after a person familiar with the matter denied the report.

The initial story published by Puck News said Disney CEO Bob Chapek had tapped some of his closest deputies to explore a separation of the sports channels from the rest of the company.

Credit: Disney

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CNBC was among the first to refute the original news, calling the report “inaccurate”. A Tweet notes:

After Disney shares jumped to session high on a report that said the company is looking into potentially exploring an ESPN spinoff, a source tells CNBC the report is inaccurate. The source tells CNBC the company aims to pursue further value through ESPN+ and sports betting.

After Disney shares jumped to session high on a report that said the company is looking into potentially exploring an ESPN spinoff, a source tells CNBC the report is inaccurate. The source tells CNBC the company aims to pursue further value through ESPN+ and sports betting. pic.twitter.com/biW2REmpqc

— CNBC Now (@CNBCnow) October 15, 2021

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According to CNBC anchor Julia Boorstin, a source “close to the situation” shared that Disney is actually “focused on building the value of ESPN+ for its digital bundle, and that it is also pursuing sports betting for ESPN and ESPN+.”

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This indicates that Disney certainly isn’t planning to sell off the sports giant anytime soon, though it is worth noting that major commentators at the network — including the divisive Stephen A. Smith — were asked to take pay cuts during the COVID-19 pandemic last year.

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For now, it seems that Disney still finds ESPN lucrative enough as part of its Disney+, Hulu, and ESPN+ streaming bundle that it would not be worthwhile to sell the network — which is home to programming about all major professional leagues, including the NFL, the NBA, the MLB, and the NHL — at this time.

What do you think? Is ESPN still relevant as linear television viewership declines?