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The activist investor and CEO of Third Point, who made headlines last month when he proposed spinning off media giant ESPN, had a change of heart over the weekend.
“We’ve gained a better understanding of ESPN’s potential as an independent business and at $DIS to reach a global audience,” Loeb tweeted Sunday.
Third Point ESPN President James Pitaro said he looks forward to “executing on growth and innovation plans, great collaboration as part of The Walt Disney Company.”
For years, ESPN was considered the crown jewel of Disney’s media empire, but with cord-cutting and the streaming revolution underway in the entertainment industry, the network has lost some of its luster. But live sports — especially the NFL — are still the most popular programs on TV, so the network’s ad revenue still makes it a valuable Disney portfolio.
Last month, Third Point bought a new stake in Disney, saying at the time that “Disney’s complex transformation is succeeding” and the investment company “has confidence in Disney’s current situation.”
However, Loeb wanted to see five changes in DC, which he said would “unlock additional value in the near term.”
One change that got a lot of attention was Disney’s release of ESPN. “A strong case can be made that the ESPN business should be offered to shareholders with an appropriate debt burden” to reduce DC’s debt, Loeb said.
“What’s more telling is that when word got out on the street that Disney was going to spin off ESPN, we wanted to buy no less than 100 inquiries,” Chapek added. “What does that tell you? That says we have a really good thing.”
— CNN Business’ Paul R. La Monica contributed to this report.
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