How ESPN Went From Disney’s Financial Engine to Its Problem
Summary
It was ESPN money that helped Disney pay for acquisitions — Marvel, Lucasfilm, Pixar, 21st Century Fox — and build a streaming service, transforming itself into a colossus and perhaps traditional media’s best hope of surviving Silicon Valley’s incursion into entertainment. Analysts expect per-share profit to have declined 11 percent, as the company contends with disappointing box office results, softening attendance at Walt Disney World and two striking Hollywood unions. ESPN has consistently raised its affiliate fee to offset this decline, but its ability to continue doing so will be limited in the coming years: By 2027, fewer than 50 million homes will pay for cable television, according to PwC, the accounting giant. “There is a causality there.” To pay for the rights, ESPN has cut back in other areas — primarily original programming — and relied more heavily on a handful of its most famous personalities, like Stephen A. Smith. Sports leagues are reluctant to allow media companies to offer games exclusively on streaming platforms, where they almost always reach much smaller audiences than on network or cable television.