Disney to Break Out ESPN Financials

Disney seeks investor for ESPN as streaming era looms

Disney has revealed ESPN's financial performance for the first time, showing a 20% profit plunge over the first nine months of the 2023 fiscal year due to cable subscribers cutting the cord. Profits in this period amounted to $1.48 billion, with sales down 1.3% to $13.2 billion.
Disney is seeking a strategic investor for ESPN in anticipation of the growing popularity of streaming services. The company intends to offer ESPN as a streaming service to adapt to changing consumer preferences and attract cord-cutters.
Despite the difficulties, ESPN remains a significant source of profit for Disney, accounting for 19% of Disney’s operating profits in the nine months ending July 1, 2023.
Plans to separate ESPN from Disney's entertainment sector were unveiled in February 2023, alongside a company-wide restructure. The split reveals that ESPN revenue is predominantly made up of affiliate fees ($8+ billion), compared to advertising ($3.2 billion) and subscription fees ($1.1 billion).
In response to growing cord-cutting trends, Disney is exploring partnerships to expand ESPN's reach. The company is in talks with Verizon and T-Mobile to distribute the upcoming ESPN streaming service. Efforts to find a minority shareholder for ESPN are also underway.