February 23, 2024

Disney Plus

According to Bloomberg, Nelson Peltz, an activist investor for ESPN’s parent company, Walt Disney, is proposing a bundled package between ESPN+ and Netflix streaming services.

The deal comes as Netflix shows increased interest in sports content. Peltz, behind Trian Fund Management, holds nearly $3 million worth of Walt Disney stock.

The Bloomberg report said that Peltz was reading a whitepaper discussing the reforms that will push for this bundled package. The proposal also comes when bundled packages by streaming platforms are becoming increasingly popular.

Disney Activist Wants Reforms to Streaming Service

Peltz has been advocating for changes at Disney. The activist investor has previously lobbied the company’s CEO, Bob Iger, and the Board of Directors to take more active steps toward improving profitability and raising the value of the company’s stock.

The Disney stock has been on a decline over the past three years. Its value is currently half of what it was in March 2021. Peltz wants the company to take proactive measures, such as improving the streaming service to maximize profitability.

Given Trian’s massive stake in Disney, the company is also seeking two seats on the Disney board. If this request is granted, Trian and Peltz will have more say over the decisions made by the company, and his plans to improve Disney’s streaming business might succeed.

Peltz is expected to provide a more detailed plan for Disney in a soon-to-be-released whitepaper. This whitepaper will be due soon, following the subsequent reports of the quarterly earnings by Disney set for February 7.

Streaming Bundles Continue to Pick Interest

This whitepaper will likely highlight the changes Disney should introduce regarding streaming bundles. The concept of bundled streaming packages is rapidly gaining attention in the industry as companies seek to maximize profitability and revenues.

Disney is already offering incentives to users as it seeks to lower costs and boost profitability. The entertainment giant offers its ESPN+, Disney+, and Hulu services through a discounted bundle. However, it remains with the headache of increasing customer numbers while remaining competitive in the industry.

The proposed plan to bundle the ESPN+ and Netflix streaming services could turn the company’s finances around. It could boost the company’s profitability, which lost $387 million during the most recent quarter.

The plan to bundle the two packages remains merely a proposal. Neither company has shown any interest in being open to the agreement. In the past, Disney has declined reforms announced by Trian.

On the other hand, Netflix is already pursuing bundled packages. Last year, the streaming giant announced a bundled package with Max for only $10 monthly. This bundled package was open to Verizon customers.

Furthermore, the company is also pursuing more sports content. While releasing its fourth quarter 2023 financial results, Netflix announced a major deal with WWE for the live airing of Raw. The deal will see Netflix solidify its position as the largest streaming service globally.

Disney Pursues Potential ESPN Buyers

In July 2023, Iger told CNBC that he was open to large-scale reforms at the entertainment company. Some of those changes include selling part of ESPN to a strategic partner.

At the time, the executive said a challenging environment informed the decision. “We’ve gotten a lot done very quickly, significant cost reductions and significant realignment of the company,” he said. “But we’re dealing head-on with some of our biggest challenges.”

With Disney exploring a possible bundled package with ESPN, Peltz’s proposal might likely be considered. Netflix might also consider the possibility as the streaming giant focuses on more sports content.


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