Chapek’s ESPN Audible

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Good evening, and greetings from Sun Valley, where the Allen & Company confab is already well underway. In tonight’s letter, a look at how the Netflix sell-off and the market correction have shifted the calculus for Hollywood executives here at the conference—and a scoop from the Lodge on Bob Chapek’s new thinking on ESPN.

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Fast Times at Sun Valley High

Stock prices may be down, but the mood isn’t dour—though companies that once fantasized about shedding linear assets for that coveted Netflix multiple are now thankful for their dual revenue streams. That may be one reason why Disney has abandoned talks to spin ESPN.

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“Everybody is way down,” a notable media executive told me this morning while shuffling between meetings here at the Allen & Company conference in Sun Valley. This was not his assessment of the mood at the conference, per se—indeed, most executives I’ve seen or spoken with here seem quite chipper and upbeat, as they almost always do at Herb Allen’s annual confab. It is, rather, an obvious, dispassionate assessment of where things stand financially in the wake of the Netflix sell-off and an absolutely brutal correction in the market: Reed Hastings and Ted Sarandos have seen Netflix’s share price fall 66 percent since the last time they were here. Bob Chapek’s Disney is down 45 percent. David Zaslav, who launched Warner Bros. Discovery at $24-a-share in April, is down 44 percent to $14 a share. None of these men seem at all unhappy, but they do appear at least momentarily humbled.

The market conditions have changed the tone and focus of the Sun Valley gossip, in myriad ways. At the macro-level, it’s shifted some of the conventional wisdom about the M&A landscape. For years, Sun Valley media merger intrigue centered on...

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