Disney gives investors a look at ESPN’s financials
SportsCenter at ESPN Headquarters.
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The reorganization of DisneyESPN’s business is to give investors a look at ESPN’s financials for the first time.
The insider look — which shows ESPN’s revenue has declined in recent quarters — comes as the parent company looks for a strategic investor in what has long been considered the company’s crown jewel.
Earlier this year, Disney announced a series of changes at its company that not only resulted in massive cost cuts and the layoff of more than 7,000 employees, but also a restructuring of the company into three segments.
The company is now divided into three business areas, one of which is an ESPN segment, which includes the TV channel and the streaming service ESPN+. This separated sports from entertainment, which now includes most streaming and media activities. Parks, experiences and products form the third unit.
Disney is planned release Fiscal fourth quarter results, November 8.
On Wednesday, Disney reported that its sports segment, which also includes smaller entries from Star India, had total revenue of more than $13 billion in the nine months ended July 1, with that amount deducted from the revenue of the entertainment segment in which it was previously reported became. ESPN generated more than $12.5 billion in the nine-month period.
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ESPN’s revenue – its domestic business accounts for the majority of ESPN’s revenue, with some coming from abroad – has declined in recent quarters.
The network reported revenue of about $4.06 billion in the third quarter, compared to nearly $4.1 billion in the second quarter and about $4.4 billion in the first quarter, according to the data released Wednesday message emerges.
The report shines a light on ESPN, the cable television network that has long earned the company high traditional television fees and viewership, even at a time when cable providers are rapidly losing customers to streaming.
ESPN was the linchpin of not just Disney’s cable TV channels but the entire traditional package, commanding some of the highest television fees. Last month, as football season began, a horse fight broke out between Disney and the cable provider Charter communicationwhich resulted in Disney channels being reopened to customers and some gaining access to the streaming services as part of the deal.
Part of the battle has been Disney’s future prospects for ESPN in streaming. Disney plans to make the ESPN channel a direct-to-consumer option outside of the package for customers in the future.
Disney’s restructuring was part of the company’s response to activist investor Nelson Peltz and helped spur a few months of pushback from his company, Trian Fund Management. However, Trian increased his stake in Disney last week and now a second proxy fight is brewing, CNBC reported.
