- Activist investor Dan Loeb indicated in a tweet that he's going to retreat from his push to get Disney to spin off ESPN.
- The tweet follows comments from Disney CEO Bob Chapek, who told journalists at this weekend's D23 Expo that he has big plans for ESPN.
Activist investor Dan Loeb indicated that he's going to retreat from his push to get Disney to spin off ESPN, reversing a position he had pushed less than a month ago.
In a tweet Sunday morning, the Third Point CEO said he sees the virtue of keeping the sports network as a separate vertical within Disney's conglomerate.
"We have a better understanding of @espn's potential as a standalone business and another vertical for $DIS to reach a global audience to generate ad and subscriber revenues," Loeb said.
"We look forward to seeing Mr. Pitaro execute on the growth and innovation plans, generating considerable synergies as part of The Walt Disney Company," he added, referencing Disney Chairman James Pitaro.
The tweet follows comments from Disney CEO Bob Chapek, who told journalists at this weekend's D23 Expo that he has big plans for ESPN, though he did not disclose details. Chapek told Variety that "we had no less than 100 inquiries of people that wanted to buy" ESPN when word hit that it was potentially up for sale.
"What does that tell you? That says we've got something really good," he said. "And if you have a strategic plan, a vision for where it fits into the company over the next 100 years, then you don't exactly want to divest yourself of it. And we have that plan. We've not shared that plan."
The reversal in Loeb's position comes after he took a new stake in Disney in the second quarter valued at about $1 billion, or 0.4% of the company. Disney's shares have rallied about 6.5% over the past month. Loeb had moved out of an earlier position in the company when shares fell as interest rates surged.
Disney official insist that ESPN is still considered an integral part of the company.
"As Bob has said, ESPN is an integral part of The Walt Disney Company, and he believes that its full potential will continue to be realized as we execute against our strategic vision for the most trusted brand in sports," said Kristina Schake, Disney's chief communications officer.
At the heart of his push to spin off ESPN was a belief that the new business could expand into areas including sports betting. He compared it to the eBay spinoff of PayPal "while continuing to utilize the product to process payments."
Along with the ESPN issue, Loeb urged Disney to bring streaming giant Hulu directly onto the Disney+ direct-to-consumer platform. NBC Universal parent Comcast has an agreement to sell its 33% Hulu stake to Disney in two years. Loeb recommended that Disney "make every attempt" to acquire the remaining minority stake before the sale deadline.
"We believe that it would even be prudent for Disney to pay a modest premium to accelerate the integration," Loeb said in a 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."
Disclosure: CNBC is part of Comcast's NBCUniversal.