BURBANK, Calif.—It will cost The Walt Disney Co. about $30 million to shut down its Mobile ESPN MVNO, but the company remains positive on the prospects for its Disney Mobile service, according to Disney’s chief financial officer.
Thomas Staggs, senior executive vice president and CFO for The Walt Disney Co., said during a conference call with analysts and investors that the ESPN and Disney mobile virtual network operators “are really two fundamentally different consumer propositions.”
“We remain excited about the prospects for the Disney Mobile service,” he said. “The feedback we’re getting, at least, is that it actually delivers on fundamental needs that parents have in terms of their mobile-phone service. We’re excited to see where it goes. … It’s early days yet, but it looks pretty interesting.”
Mobile ESPN announced last week that it will be shutting down service as of Dec. 31, after operating for about eight months. The shut-down costs include customer reimbursements for handsets, which Staggs said was only fair to consumers. He called Mobile ESPN “an innovative and good product,” but praised ESPN management for making the decision to get out of the MVNO business and into a content licensing model. Mobile ESPN has said that it is in conversations with carriers over the fruit of its mobile effort.
“They went out with a strong product, and over time, the assessment that they made was that … they would be better off switching to a different model,” Staggs said. “I think we’d like every new business opportunity that we go after to work out, but the fact is that not every one will work out exactly as one might hope.”
