What Will a Cable-Free ESPN Subscription Mean for Disney (DIS)?

NEW YORK (TheStreet) --Disney  (DIS) could be introducing an ESPN streaming service, which does not require a cable subscription, CNBC's Julian Boornstin reported on "Fast Money Halftime Report" today, citing unnamed sources.  

"I'm hearing that Disney is looking for ways to bring a different kind of sports-related content directly to consumers, outside the TV bundle. The Disney-owned channel plans to unveil a new "skinny" bundle for its users" Boorstin said, again citing her sources.

CNBC hosted a panel to debate the potential impact the service could have, if any, on Disney stock.

"I love it. If they can get directly with the consumer on a more regular basis it's going to be good for any media player. I think it's a real positive," John Najarian, co-founder of Najarian Family Office and Najarian Advisors told Boorstin. 

"This seems more experimental to me than in terms of something that could actually move the needle. Smart for them to experiment, but when you actually look at what properties are going to be involved, nobody wants a "skinny" package. I don't think it's going to be a mass market thing, I just think it's smart of them to see what they can play with," Joshua Brown, CEO of Ritholtz Wealth Management, explained.

"The question is now if they go back to their consumers, what are the cable companies going to say because it's really the live entertainment that people want to pay for. But I do think they have to experiment in this way," added Sarat Sethi, managing partner at Douglas C. Lane & Associates

One resounding message the analysts continued to reiterate when assessing the Disney stock, was that it's become less about ESPN and more about the studios. With recent film successes such as "Finding Dory" and "Star Wars," the studios have been knocking it out of the park.

Shares of Disney are trading higher by 1.24% to $99.64 on Friday afternoon. 

Separately, TheStreet Ratings rates Disney as a "Buy" with a ratings score of "A-." This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that TheStreet Ratings rates. 

The company's strengths can be seen in multiple areas, such as its growth in earnings per share, revenue growth, notable return on equity, expanding profit margins and good cash flow from operations. TheStreet Ratings feels its strengths outweigh the fact that the company has had lackluster performance in the stock itself.

TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author. 

You can view the full analysis from the report here: DIS


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