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Staggs: Market Over-Reacted in August Sell-Off

Walt Disney Co. chief operating officer Tom Staggs, the man that most analysts believe will take over the CEO spot once chairman and CEO Bob Iger retires in 2018,  defended the programmer at an industry conference Thursday, adding that the recent falloff in content stocks was overblown.

Disney shares plunged in early August  after Iger revised ESPN’s guidance, based on what he said was a slight increase in subscriber losses. But investors took that news as a signal that much worse times were ahead, and sent the entire sector into a tailspin.

“The short answer is, yes,” Staggs said at the Bank of America Merrill Lynch Media, Communications and Entertainment conference in Beverly Hills, Calif., when asked if the selloff was an over-reaction.

Staggs defended ESPN, adding that the sports juggernaut has a long runway of growth ahead of it. But he also acknowledged that the landscape is evolving.

While over-the-top services continue to emerge and viewing habits are being spread across linear channels, DVRs, VOD and SVOD, the perception of the pace of that change isn’t quite in step with the reality of the business.

“People sometimes think of this as a zero-sum game, more than is appropriate,” Staggs said. “We continue to believe in the bundle and we will continue to look at ways to enhance the value of that.”