Sorry, ESPN Fans: Disney CEO Bob Iger Loves The Cable Bundle, So No Streaming For You

If you’re an avid sports fan who is thinking about cutting the cable cord, don’t expect Bob Iger to throw you a lifeline. The chief executive of the Walt Disney Company, the corporate parent of ESPN, offered a staunch defense of the traditional cable bundle on Thursday, telling analysts in a conference call that he’s in no rush to offer ESPN as a standalone service -- at least not if it means threatening the status quo.

“We don’t feel a compelling need to take a product to market right now,” Iger told Morgan Stanley’s Ben Swinburne in response to a question about when a broadband-only version of ESPN might become available for customers without cable subscriptions.

There had been hopes of a different answer in light of news last month that both HBO and CBS will launch “over-the-top” streaming services for non-cable subscribers. In launching the services, Disney’s biggest rivals appear to be acknowledging (finally) that the growing tide of younger consumers who get their television exclusively from the Internet is not going to reverse course.

But instead of joining the movement, Iger said Disney has a priority to preserve the status quo by making sure the multichannel cable bundle is “sustainable and valuable.” And who can blame him? ESPN costs the average cable subscriber considerably more money than any other network. In fact, it’s not even close. Cable companies such as Comcast Corporation and Time Warner Cable Inc. pay an estimated $6.04 per subscriber to carry ESPN each month, according to the media research firm SNL Kagan. That’s far ahead of TNT, the second most expensive cable network, which only costs $1.48.

Given its high costs, it’s no surprise that ESPN is being used as ammunition by viewers advocating for à la carte programming, particularly viewers who don’t know the difference between a wide receiver and a wide-brim hat. “I don’t watch sports,” is the common refrain from TV watchers who say they would drop ESPN from their cable subscription if it meant a lower bill.

Running parallel to that argument is the assertion from hard-core sports fans who say that ESPN is the only thing preventing them from dropping their cable subscriptions completely. If the sports network were available as a streaming service, they would cut the cord and be done with pay TV.

Both of these narratives appear to be leading us in the same direction -- the end of the bundle as we know it -- and as arguments over the future of the cable bundle continue to escalate in the coming years, no network will feature so prominently in those debates as ESPN.

Iger said Disney doesn’t foresee the traditional cable bundle going away anytime soon, but he assured analysts that ESPN will be ready if it does. “We will be well positioned to go direct to the consumer or with à la carte offerings if the marketplace demands it,” he said. “But we don’t feel a great need to do that now.”

In other words, Iger knows the bundle’s days are numbered, but why rush things? Watching ESPN online may make sense for some viewers. Ditching ESPN and going with a slimmer bundle may make sense for others. But neither makes sense for Disney.

If Iger seems to be acknowledging anything, it’s that he knows the status quo is not a particularly great deal for either hard-core sports fans or people who don’t watch sports, but that’s OK for now.

So expect a compromise: Streaming services that offer some ESPN content online but not all of it. “If you are really a great NBA fan ... your over-the-top package isn’t going to satisfy you enough,” Iger said. “It may enhance your connection to or your enjoyment of the sport, but it’s not going to replace it. And that’s how we are looking at it.”

Read the full transcript of the conference call here.

Christopher Zara is a senior reporter who covers media and culture. Got a news tip? Email me here. Follow me on Twitter @christopherzara.