Activist Investor Dan Loeb recedes from asking Disney to sell ESPN

(Reuters) -Billionaire activist investor Daniel Loeb backed off from pushing Walt Disney (NYSE:DIS) Co to spin off its sports television network ESPN, saying he has a "better understanding" of ESPN's potential for the media company's growth.

This comes after Disney Chief Executive Bob Chapek rejected Dan Loeb's call for spinning off ESPN, the Financial Times reported on Saturday.

The investor said in a tweet https://twitter.com/DanielSLoeb1/status/1568958464164069376?ref_src=twsrc%5Etfw%7Ctwcamp%5Etweetembed%7Ctwterm%5E1568958464164069376%7Ctwgr%5E90ee1840a55a8505371308e1e7166f82e0649fb5%7Ctwcon%5Es1_&ref_url=https%3A%2F%2Fwww.bloomberg.com%2Fnews%2Farticles%2F2022-09-11%2Floeb-backs-down-on-call-for-espn-spinoff-after-disney-rejection on Sunday that he looks forward to seeing ESPN Chairman James Pitaro execute on the growth and innovation plans, "generating considerable synergies as part of" Disney.

Loeb, who runs Third Point, in August disclosed a stake of roughly $1 billion in Disney and announced plans to push the company to make a string of changes, from spinning off ESPN to buying back shares and adding board members.

Disney had been "deluged" with interest from companies seeking to buy ESPN earlier this year amid rumors that the company was weighing a sale of the cable network, Chapek told the FT.

"If everyone wants to come in and buy it or spin it with us, I think that says something about its potential," the FT quoted Chapek as saying. "I think its potential is within the Disney company."

"We have a plan for it that will restore ESPN to its growth trajectory."

On Loeb's plan to push Disney to add new board members, Chapek defended the board, saying it had a broad "range of skillsets" and that the average tenure on it was four years.

Third Point, which owns roughly 0.4% stake in Disney, has also proposed that Disney accelerate the timetable for buying the remaining stake in streaming service Hulu from minority stakeholder Comcast Corp (NASDAQ:CMCSA) ahead of the planned 2024 acquisition.

Commenting on that, Chapek told the FT that he would love to settle the matter but Comcast had seemed reluctant.