ESPN's shrinking subscriber base has weighed on Walt Disney's (DIS) fortunes for some time.

And as many observers have suggested, in order to remain one of the strongest players in the entertainment industry, the House of Mouse should spin off the sports television channel immediately.

This would remove ESPN's impact on Disney's otherwise solid results. In addition, it would get an independent valuation of ESPN that could help Disney obtain a buyer that would pay a premium.

ESPN, which was once valued at $50 billion, has changed hands many times over the years.

Launched in 1979, the sports network was first bought by Getty Oil and then ABC. When Capital Cities Communications acquired ABC in the mid-1980s, ESPN was part of the package.

Disney then bought ESPN in 1996.

Just a few years ago, ESPN generated more revenue for Disney than its other properties combined. But then viewers started "cutting the cord" on cable TV.

ESPN has lost a big chunk of revenue by losing 7% of its audience. With ESPN having as many subscribers as it did in 2005, this represents a decade of lost growth.

Fiscal fourth-quarter operating income at Disney's cable networks fell 13% from a year earlier to $1.45 billion, including a 13% drop in ESPN advertising revenue. ESPN's increasing production and programming costs haven't helped the situation.

Nobody, it seems, wants to buy a sports channel that has lost about 7 million subscribers in two years. And looking ahead, the company's subscriber numbers are uncertain.

With Amazon reportedly interested in live sports, and Twitter having already tried live sports streaming, competitive pressure is only increasing for ESPN.

Spinning off ESPN would be a relief for many Disney shareholders, by allowing the company's revenue gains in its other divisions to shine.

However, Disney must be careful to avoid depressing ESPN's valuation, which would make the transaction of little value to the entertainment and media company.

ESPN is valued at between $30 billion and $40 billion, according to RBC analysts.

Stand-alone sports networks are having a tough time as sales remain sluggish. In addition, bidding wars for sports broadcast rights have intensified, with more costs and longer payback periods, and cord-cutters have disrupted the business of cable bundles, something that had helped ESPN grow.

Shares of MSG Networks, which owns sports networks and teams, haven't moved much this year.

But at some point, Disney's media rivals could try to buy ESPN. Among those that could be interested are Comcast's NBC Sports Network and Fox. 

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If Disney manages to offload ESPN, its stock, which is down more than 4% this year, should soar once again.

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The author is an independent contributor who at the time of publication owned none of the stocks mentioned.