Disney gives investors a look at ESPN financials, including recent revenue declines

Disney gives investors a look at ESPN financials, including recent revenue declines


SportsCenter at ESPN Headquarters.

The Washington Post | The Washington Post | Getty Images

The reorganization of Disney‘s business is giving investors a glimpse at ESPN’s financials for the first time.

The inside look – which shows ESPN’s revenue has been decreasing in recent quarters – comes as the parent company looks for a strategic investor for what was long considered a crown jewel of the business.

Earlier this year, Disney announced a broad array of changes to its business that not only saw massive cost cuts and more than 7,000 employees laid off, but a restructuring of the company into three segments.

The company is now broken down into three divisions, one of which is an ESPN segment that includes the TV network and ESPN+ streaming service. This split sports from entertainment, which now includes most of its streaming and media operations. Parks, experiences and products make up the third unit.

Disney is scheduled to release fiscal fourth quarter earnings Nov. 8.

On Wednesday, Disney reported that its sports segment, which includes smaller contributions from Star India, had more than $13 billion in overall revenue for the nine months ended July 1, subtracting the amount from its entertainment segment revenue, where it was previously reported. ESPN generated more than $12.5 billion of that nine-month total.

Read more: Netflix is leaning more into sports programming

ESPN’s revenue – the domestic business makes up the bulk of ESPN’s revenue, with some coming from international – has fallen in recent quarters.

The network had roughly $4.06 billion in revenue in the third quarter, down from nearly $4.1 billion in the second quarter and about $4.4 billion in the first quarter, according to Wednesday’s filing.

The report shines a light on ESPN, the cable-TV network that has long raked in high traditional TV fees and viewership for the company – even during a time when the cable providers are losing customers at a fast clip in favor of streaming.

ESPN has been the linchpin not only of Disney’s cable-TV networks, but of the overall traditional bundle, reaping some of the highest TV fees. Last month, as football season kicked off, it ignited a carriage fight between Disney and cable provider Charter Communications, which ended in Disney channels being turned back on for customers and some getting access to it streaming services as part of the deal.

A part of the fight was Disney’s future prospects for ESPN on streaming. Disney plans to make the ESPN channel a direct-to-consumer option outside of the bundle for customers in the future.

The reorganization of Disney had been part of the company’s response to activist investor Nelson Peltz and helped to fend off his firm, Trian Fund Management for a few months. However, last week, Trian upped its stake in Disney and now a second proxy battle is brewing, CNBC reported.

ESPN conversations ongoing with potential partners, says Chairman Jimmy Pitaro



Source

IMAX is headed for its best year on record as it capitalizes on Hollywood’s box office rebound
Business

IMAX is headed for its best year on record as it capitalizes on Hollywood’s box office rebound

General atmosphere during an IMAX private screening for the movie “First Man” at an AMC theater in New York City on Oct. 10, 2018. Lars Niki | Getty Images Entertainment | Getty Images More than a year before “F1: The Movie” would eventually hit theaters, Apple struck a deal with IMAX. The studio secured the […]

Read More
How Iconiq, the wealth firm backed by Mark Zuckerberg, brings ultra-rich philanthropists together
Business

How Iconiq, the wealth firm backed by Mark Zuckerberg, brings ultra-rich philanthropists together

Meta CEO Mark Zuckerberg and Square CEO Jack Dorsey. Manuel Orbegozo | Handout | Reuters A version of this article first appeared in CNBC’s Inside Wealth newsletter with Robert Frank, a weekly guide to the high-net-worth investor and consumer. Sign up to receive future editions, straight to your inbox. Even as tax changes may reduce giving by […]

Read More
Patrick Mahomes is investing in his love for coffee — and isn’t thrilled about an 18-game season
Business

Patrick Mahomes is investing in his love for coffee — and isn’t thrilled about an 18-game season

Kansas City Chiefs quarterback Patrick Mahomes has added “coffee entrepreneur” to his already packed resume. The three-time Super Bowl champion has invested in Throne Sport Coffee, adding to the 29-year-old superstar’s portfolio off the field. As his Chiefs and the rest of the NFL gear up for the upcoming season, Mahomes spoke to CNBC about […]

Read More