Disney Names Consumer Chief Pitaro as New President of ESPN

(Bloomberg) -- Walt Disney Co. named James Pitaro president of ESPN, tapping its consumer products chief to lead the struggling but profitable sports business into a new era of video streaming.

ESPN, which includes the flagship sports channel, related networks, websites and a magazine, has historically been the biggest profit generator for Disney. But operating income at the company’s cable networks has fallen for two years as consumers cancel cable subscriptions and the cost of sports programming rises. Last quarter, theme parks out-earned Disney’s TV business.

Pitaro replaces long-time leader John Skipper, who stepped down in December to seek assistance for substance abuse.

ESPN’s new president will need to navigate a shifting media landscape. Under Chief Executive Officer Robert Iger, Disney has invested $2.58 billion over the past two years buying majority control of BamTech, the video streaming business of Major League Baseball. In the next few weeks, Disney plans to introduce ESPN+, a $5-a-month streaming service that will include 10,000 live sporting events a year, leaning heavily on pro baseball, hockey, soccer and college sports.

In addition to the business challenges, ESPN has found itself in hot water culturally, with President Donald Trump saying liberal bias at the network has led to falling ratings. Jemele Hill, who co-anchored one of ESPN’s signature shows, SportsCenter, called Trump a white supremacist on Twitter last year. Disney’s decision to not immediately suspend her prompted White House calls for her to be fired, but in January ESPN announced she was moving to edit an ESPN-related website called The Undefeated, which deals with the intersection of race and sports.

Pitaro, 48, has run the company’s consumer products arm, the largest entertainment licensing business in the world and home to everything from Mickey Mouse ears to “Star Wars” lightsabers. That business hit a rough patch, too, with profit falling 11 percent in the fiscal year that ended in September, as the company struggled to replace licensing revenue from the earlier hits “Frozen” and “Star Wars: The Force Awakens.”

The appointment puts Pitaro in position to potentially succeed Iger, whose contract runs through December 2021.

To contact the reporter on this story: Christopher Palmeri in Los Angeles at cpalmeri1@bloomberg.net.

To contact the editors responsible for this story: Crayton Harrison at tharrison5@bloomberg.net, Rob Golum

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