Disney's Iger On ESPN: We'll Disrupt When We Damn Well Feel Like It

Last year, Disney stock took a repeated beating as Wall Street started to realize the company wasn't faring particularly well in the face of Internet video revolution. Tens of billions in stock value instantly evaporated as investors learned that ESPN had lost 7 million customers in just the last two years. Evidence suggests this was largely thanks to the fact that ESPN leadership was utterly oblivious to the cord cutting and cord trimming trend, or the fact that a growing number of customers (the majority, in fact) are simply tired of paying for a channel they don't watch, yet pay an arm and a leg for.

To try and soothe nervous investors, Disney and ESPN executives have been making the rounds lately in an attempt to "change the narrative" on cord cutting (read: pretend the company wasn't caught with its pants down). ESPN Boss John Skipper, for example, recently admitted the company is seeing subscriber losses due to users shifting to so-called "skinny" bundles, but tried to argue these were older users the company didn't really want anyway.

This week, Disney CEO Bob Iger is the one making the rounds, though you may not be able to hear what he's saying over the sound of his own denial:

"The notion that either the expanded basic bundle is experiencing its demise or that ESPN is crating in any way from a [subscribers] perspective is just ridiculous," Iger said at one point. "Sports is too popular."

But despite what Iger thinks, ESPN is not synonymous with sports, and cratering under the load of an evolving market is exactly what's happening. For decades, ESPN enjoyed being part of channel bundles that generated revenue regardless of whether or not consumers actually watched it. As the traditional cable bundle gets broken up, ESPN's faced with the fact that 56% of cable users no longer want to watch the channel if it means saving a little money. In response, ESPN's trying to sue companies trying to give consumers what they want, a losing proposition long term.

As alternative streaming options rise, ESPN subscribers will dip, and the company's long-term (and hugely expensive) sports programming deals are going to start feeling very heavy. ESPN could try and offer a direct streaming service, but with dropping subscribers and soaring programming costs, the numbers aren't very pretty. Just don't point any of this out, or, like pay TV analyst and frequent ESPN critic Richard Greenfield recently found out, certain media outlets may decide to set you on fire in the Hollywood town square.

Like so many legacy industries used to revenues they haven't actually had to earn in years, it's pretty clear that Iger believes that ESPN is the one that gets to decide when it gets disrupted and when it has to dirsupt:

"We're not going to sit back and let the disrupters just disrupt," Iger said. "We're going to participate in some of that disruption. And we'll decide when the time is right to be more disruptive than we have been if we really think the business model is shifting rapidly. So far we do not see that."

Like most people, ESPN execs see what they want to see. Wall Street now sees it, which is why Iger's flapping his arms and doing this particular chicken dance in the first place. It's all part and parcel of the cable and broadcast industry's sincere belief that the legacy cable TV cash cow is going to live forever -- so they really don't have to rush to adapt -- or compete on price -- any time soon. But years of denial and inflexibility are starting to catch up with executives mentally stuck in the late nineties, and if 2015 was any indication, 2016's going to demolish any lingering fantasies.

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