Disney CEO Bob Iger (DIS) said Thursday that he would take an “expansive” look at the entertainment giant’s traditional TV assets, signaling the potential for strategic options that could include a sale.

The company’s TV portfolio includes broadcast network ABC and cable channels FX, Freeform, and National Geographic. Iger made the comments in a lengthy interview with CNBC on Thursday morning, a day after the company announced it will be extending his contract through 2026.

“We are expansive in our thinking about [the linear business], and we’re going to look expansively… [for] opportunities there because, clearly, it’s a business that’s going to continue to struggle,” he said.

When asked by CNBC’s David Faber what he meant by “expansive,” Iger declined to say. The executive added the current distribution model is “definitely broken,” saying the linear TV assets “may not be core” to Disney’s strategy any longer. He stressed that the company will continue to remain “objective” about the future of its asset base.

The comments come as more consumers drop their cable packages in a trend known as cord-cutting and instead opt for streaming services that are less profitable for media companies.

“The disruptive forces that have been preying on that business are greater than I thought,” Iger said. “We have to call it like it is [and] come to grips with that now.”

Disney stock was muted in early morning trading following his comments.

Iger open to strategic partners for ESPN’s direct-to-consumer transition

Iger also said the company was looking at ESPN differently than its other linear networks.

“Sports stands very tall in the media landscape for its ability to convene millions of people all at once,” Iger said, reiterating his bullish stance on ESPN and confirming plans to take the network fully over-the-top as a direct-to-consumer (DTC) platform.

Iger said the company is open to strategic partners, either through a joint venture or part ownership, to enable ESPN to make the transition to DTC.

“The transition needs to be carefully timed and considered so that it’s economically valuable,” he said.

Iger added he’s looking for partners that “come with value” — whether that be content value, distribution value, or capital value to de-risk the business. If that’s found, “we’re going to be very open-minded about that.” He said there have been “some” conversations with possible partners but did not elaborate on potential names or timelines.

One name he did mention was Apple (AAPL) and its recently announced VR headset, which he said “lends itself to sports.”

Analysts have debated for years whether or not Apple should buy Disney. Needham analyst Laura Martin recently doubled down on her take that the tech giant should acquire the entertainment company, noting that a deal would help Apple drive adoption of the Vision Pro.

Disney CEO Bob Iger's contract was recently extended through 2026. (AP Photo/Mark Lennihan, File)

Disney CEO Bob Iger’s contract was recently extended through 2026. (AP Photo/Mark Lennihan, File)

On Wednesday, Disney officially extended Bob Iger’s CEO contract by another two years through December 31, 2026.

Iger, who stepped back into the CEO position in November, has remained hyper-focused on profitability as investors put more emphasis on margins.

The executive has worked to establish new revenue streams like a recently launched ad-supported tier for its streaming service, Disney+. The company has also announced price increases on the service to help pare losses and lift metrics like average revenue per user, or ARPU. Iger reaffirmed the company’s outlook of reaching streaming profitability by 2024 in its last earnings announcement.

Disney is also working to slash $5.5 billion in costs out of the business, including $3 billion in content costs. The company announced an effort to cut 7,000 jobs in February.

Disney went through its first round of layoffs at the end of March. Its second and largest round occurred in late April, with a third round taking place in May.

Iger said in a statement Wednesday, “There is more to accomplish before this transformative work is complete.”

He elaborated on Thursday that part of that “transformative work” includes ensuring current cost structures reflect the economic realities of the business and looking for opportunities for businesses that lack growth, such as linear.

Alexandra is a Senior Reporter at Yahoo Finance. Follow her on Twitter @allie_canal and email her at alexandra.canal@yahoofinance.com

Click here for the latest stock market news and in-depth analysis, including events that move stocks

Read the latest financial and business news from Yahoo Finance


Please enter your comment!
Please enter your name here