Flag on the Play: No, Disney Should Not Spin-Off ESPN

Following the Super Bowl, ESPN will ceremonially be handed the next Super Bowl through a day-long programming stunt that includes a presence at the Disneyland Resort. The Walt Disney Company has made it clear that this Super Bowl will be a company-wide event, touching nearly every part of Disney’s portfolio. At the same time, Wall Street analyst Rich Greenfield is encouraging Disney to spin off ESPN into its own standalone company.

Before even entertaining that idea, it is worth stating plainly that Wall Street analysts are often far less insightful than they are confident. While some conduct thoughtful and valuable research, you only need to listen to a single earnings call to hear questions so misguided that they make you double-check where your money is invested. I still remember an analyst asking whether Disney was concerned about having too many boy-focused franchises because of Marvel and Star Wars, completely missing the fact that those acquisitions were made, in part, to diversify a company long driven by Disney Princess and the female-skewing Disney Channel. I have also heard analysts suggest spinning off Disney’s hotels and resorts, the very segment that continued to grow as the entertainment division faced headwinds.

With all due respect to Rich Greenfield, his track record on Disney does not inspire confidence. He famously downgraded Disney’s stock over concerns about Pixar’s Up, a film that went on to gross $735 million worldwide. He also encouraged Disney to release theatrical films day-and-date on Disney+, a strategy that would have severely eroded the theatrical business. That same theatrical business delivered three billion-dollar global hits in a single year: Lilo & Stitch, Zootopia 2, and Avatar: Fire & Ash.

To be fair, forecasting the future of media is difficult, and I am sure Greenfield believes in his analysis. What is clear, however, is that he does not understand Disney’s business better than the people actually running it.

The real danger is not that analysts make bad calls. It is that corporate leadership, aware of the influence these analysts can have on stock price, chooses to follow their lead even when it conflicts with the company’s long-term interests. One of Bob Chapek’s biggest missteps was aggressively leaning into streaming to demonstrate commitment to Wall Street. When Wall Street later pivoted from wanting subscriber growth to demanding profitability, the company found itself boxed into decisions that ultimately contributed to the end of his tenure. This underscores a fundamental mismatch: Wall Street thinks in quarters, while Disney must think in decades.

When it comes to ESPN, the case for a spinoff feels especially backward. Nearly every major streamer now recognizes the value of live sports. Even Netflix, once adamant that it had no interest in sports, is now entering the space in a meaningful way. If sports are increasingly seen as essential to streaming platforms, why would Disney willingly separate itself from the most powerful and recognizable sports media brand in the world? Yes, the traditional cable bundle is shrinking, and ESPN must continue to evolve its business model. But demand for sports content is not disappearing. If anything, it is becoming more valuable.

Maybe I am wrong, and maybe Rich Greenfield is right. But if Disney leadership ever decides to spin off ESPN, that decision should be made because it is genuinely in the company’s best long-term interest, not because Disney is impatient with the stock’s multiple. Bob Iger has famously pushed back against analyst pressure in the past, understanding that Disney is not just an entertainment company, but a cultural institution. I hope Josh D’Amaro carries that same philosophy forward.

The AOL–Time Warner merger was once celebrated by Wall Street as visionary. History tells us how that turned out. Disney should not repeat that mistake by chasing short-term approval at the expense of long-term value as it could then suffer a similar fate.