Connect with us

Published

on

Disney CEO Bob Iger speaking with CNBC’s David Faber at the Allen&Co. Annual Conference in Sun Valley, Idaho. 

David A. Grogan | CNBC

Disney CEO Bob Iger has taken the unusual step of paying former executives Kevin Mayer and Tom Staggs a consulting fee to help him solve a complex problem: what to do with ESPN.

Mayer and Staggs are the co-CEOs of Candle Media. Both men are close with Iger and have served as informal advisors to him in the past. They’re working with ESPN President Jimmy Pitaro on the strategic options for ESPN and, to a lesser degree, Disney’s other linear cable networks.

related investing news

Starboard Value's Jeff Smith remains one of the most feared and creative activist investors

CNBC Pro

Iger is looking for new ways to jumpstart ESPN because the rate of U.S. cable cancellations has accelerated. In years past, ESPN could still generate revenue growth by increasing programming fees for pay TV distributors, such as Comcast, Charter and DirecTV.

That dynamic no longer exists. As ESPN revenue declines, it will become a larger anchor on Disney’s earnings. That has prompted Iger to explore different strategic alternatives.

Iger told CNBC’s David Faber last month he has had become more confident about when ESPN will launch a direct-to-consumer product. ESPN’s best programming is still exclusive to the linear cable TV bundle. Disney offers many of its lower-rated live games on its ESPN+ streaming service, which costs $9.99 per month.

When ESPN does decide to offer an unbundled subscription service, it will likely cause even more people to cancel pay TV. That’s why ESPN has waited so long to go direct to consumer.

Iger declined last month to say when he planned to offer a direct-to-consumer ESPN. It likely won’t be in 2023 or 2024, according to people familiar with the matter.

An ESPN spokesman declined to comment.

Discussions with the leagues

Iger wants to find minority partners to take equity stakes in ESPN. The sports network has held early talks with the National Football League, Major League Baseball, and the National Basketball Association on the concept, CNBC reported last month.

The National Hockey League has also been involved in these conversations, according to people familiar with the matter. An NHL spokesperson declined to comment.

Selling a part of ESPN to four professional sports leagues would be unprecedented. The leagues are focused on transitioning their products to a streaming-dominated landscape. Taking a stake in ESPN and having the network’s expertise in building an all-sports subscription service could help the leagues create a unified product and navigate the new economics outside of the traditional TV bundle.

But a deal might also irritate their existing media partners and create potential conflicts of interest. Leagues would have a vested interest in ESPN’s success if they owned equity stakes. That may not help the leagues maximize sports rights valuations, which have traditionally risen due to bidding wars among media and technology companies such as Comcast‘s NBCUniversal, Fox, Paramount Global, Warner Bros. Discovery, Apple, Alphabet and Amazon.

If ESPN can’t find a suitable deal for minority partners, it has not ruled out a full spin of the network, according to a person familiar with the matter.

Iger has resisted spinning off ESPN in the past and told CNBC he wanted to stay in the sports business. Mayer, who was executive vice president of corporate strategy at Disney before running the streaming business, has been more open minded about spinning off ESPN when he previously worked at Disney, according to people familiar with the matter.

Mayer left the company in 2020 to take the CEO job at TikTok. He declined to comment.

Iger told Faber last month that he wasn’t “necessarily” interested in spinning off ESPN as a separately traded company. The focus for Mayer, Staggs and Pitaro is finding a way where Disney can keep a majority stake in ESPN, according to people familiar with the matter. Disney currently owns 80% of ESPN and Hearst holds 20%.

Iger is looking for partners who bring advantages to ESPN in either content or distribution. Still it’s unclear if another strategic company would have any interest in owning a minority stake in ESPN. If Disney is the majority owner, it would control the fate of the network.

Watch CNBC's full interview with Disney CEO Bob Iger on streaming wars and future of media business

Continue Reading

Technology

Superhot geothermal energy could unearth big power boost for the AI era

Published

on

By

Superhot geothermal energy could unearth big power boost for the AI era

Clean Start: Drilling to reach superhot geothermal energy 12 miles below Earth's surface

Geothermal energy has been used for thousands of years, powering heating systems as early as the 14th century. It’s getting a big upgrade.

Beyond geothermal, there’s superhot geothermal, which uses ultra-deep drilling to access extremely hot rocks, extracting 5 to 10 times more power per well.

Quaise Energy, a  Massachusetts-based startup, is in the market developing the technology, which involves an electromagnetic beam that vaporizes rock. The company’s systems are able to reach superhot geothermal energy up to 12 miles below the service of the earth.

Temperatures that deep can reach 500 degrees Celsius, or over 930 degrees Fahrenheit.

“To access the resource at a scale that actually matters, we have to drill hotter first and deeper second,” said Carlos Araque, CEO of Quaise. “The oil industry routinely drills to depths of 2 to 3 miles, and maybe no more than 150 to 200 degrees Fahrenheit. We need to double or triple that to actually start to get the right resource.”

Quaise’s technology was invented at the Massachusetts Institute of Technology in 2007. The company is working to scale it for commercial use, and demonstrated its technology with oil and gas company Nabors Industries in June. While the drilling itself is costlier, the energy output is so much higher that it’s ultimately a cost savings for the heat.

“We intend to build the first in the world superhot, or super critical geothermal power plant, to show exactly that 10X output that you get by going hotter,” Araque said.

Quaise plans to pilot the plant near Bend, Oregon, and hopes to have it ready by 2028. Nabors sees it as a very timely play.

“The potential of the market, the size of the market, the fact that today’s world with data centers, with AI, with the electrification of everything, we require so much power, kind of at all times,” said Guillermo Sierra, vice president, energy transition at Nabors.

Nabors is also an investor in Quaise. Other backers include Prelude Ventures, Engine Ventures, Safar Partners, Mitsubishi and Collab Fund. The company has raised a total of $103 million.

Sierra said the technology could also help repurpose a significant portion of the labor force that’s working in oil and gas.

At a geothermal event in Washington, D.C., in March, Department of Energy Secretary Chris Wright showed strong support for geothermal energy. He said it could help with the growth of artificial intelligence and manufacturing and lower prices for electricity.

Wright also noted that President Donald Trump specifically mentioned geothermal, along with nuclear and hydropower, in his National Energy Emergency executive order. The recently passed tax and spending bill kept funding for geothermal, originally part of the Biden administration’s Inflation Reduction Act, while cutting money for other forms of renewable energy.

Continue Reading

Technology

Meta slated to reported second-quarter earnings after the bell

Published

on

By

Meta slated to reported second-quarter earnings after the bell

Mark Zuckerberg, CEO of Meta Platforms.

David Paul Morris | Bloomberg | Getty Images

Meta is set to report its second-quarter earnings on Wednesday, with analysts eyeing any changes to the company’s costs and related guidance amid CEO Mark Zuckerberg’s recent artificial intelligence hiring blitz.

Here’s what analysts polled by LSEG are expecting:

  • Earnings per share: $5.92 expected
  • Revenue: $44.8 billion expected

Investors are likely to be monitoring any comments from Zuckerberg about his company’s recent spending on AI and how that technology might benefit Meta’s core online advertising business.

Meta kicked off its AI hiring bonanza in June when it invested $14.3 billion into Scale AI, landing the data-annotating startup’s CEO Alexandr Wang to co-lead the new Meta Superintelligence Labs as the company’s chief AI officer. Zuckerberg undertook the AI strategy overhaul to help the company regain momentum after lukewarm developer response to its Llama 4 AI model, CNBC reported Tuesday.

Cantor analysts wrote that they do not expect Meta’s AI hiring spree will affect the company’s 2025 projections for total expenses, estimated to fall in the range between $113 billion and $118 billion. If anything, Meta’s AI hiring blitz could move “the target above the low end,” the Cantor analysts wrote.

Zuckerberg said in July that the company would invest “hundreds of billions of dollars” into computing infrastructure for its AI endeavors, but the company hasn’t officially revised its 2025 capital expenditures since April. That month, Meta said its 2025 capital expenditures would come in the range of $64 billion to $72 billion, which was an increase from its previous outlook of $60 billion to $65 billion.

Analysts at BofA Securities said in a research note published Friday that there are signs that Meta could post second-quarter sales at or above the high end of the company’s previous guidance of $42.5 billion to $45.5 billion for the period.

Those positive signs include an increase of advertising spending from brands during the quarter and Google’s strong quarterly earnings results from last week, the analysts wrote, which implies that Meta, second only to Alphabet in digital advertising, could also post solid results.

Don’t miss these insights from CNBC PRO

Executive Edge: Meta is reportedly considering a significant change to its AI strategy

Continue Reading

Technology

Microsoft set to report earnings after the close

Published

on

By

Microsoft set to report earnings after the close

Microsoft CEO Satya Nadella speaks at an event commemorating the 50th anniversary of the company at Microsoft headquarters in Redmond, Washington, on , April 4, 2025.

David Ryder | Bloomberg | Getty Images

Microsoft is scheduled to report fiscal fourth-quarter results after markets close on Wednesday.

Here’s what analysts are expecting, according to LSEG consensus:

  • Earnings per share: $3.37
  • Revenue: $73.81 billion

The estimates imply around 14% year-over-year revenue growth for Microsoft, the world’s No. 2 company by market cap. Revenue in the same period a year earlier came in at $64.73 billion.

Like technology rivals Alphabet and Amazon, Microsoft has been rushing to add data center capacity to meet soaring demand for running artificial intelligence models. Analysts polled by Visible Alpha expect $100.5 billion in capital expenditures in Microsoft’s 2026 fiscal year, which ends in June, representing 14% growth.

Last week Alphabet bumped up its 2025 capital spending forecast by $10 billion to $85 billion.

Investors also track Microsoft’s overall Azure cloud computing business, which is expanding as companies migrate software from on-premises data centers. Analysts polled by StreetAccount expect Azure growth of 34.4%, while CNBC’s consensus is 35.3%. In the fiscal third quarter, Azure growth came to 33%.

During the quarter, Microsoft celebrated its 50th anniversary, laid off more than 6,000 people and introduced a GitHub feature for assigning coding tasks to the Copilot assistant. The company also said LinkedIn chief Ryan Roslansky would take on added responsibility running Office productivity applications.

Microsoft shares are up about 22% in 2025, while the S&P 500 index has gained 8% over the same time period.

Executives will discuss the results with analysts on a conference call starting at 5:30 p.m. ET.

WATCH: San Francisco rolls out Microsoft’s Copilot to city staff

San Francisco rolls out Microsoft's Copilot to city staff

Continue Reading

Trending