Disney’s ESPN More Profitable Than Movie, TV Division

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Disney’s ESPN More Profitable Than Movie, TV Division

By Movieguide® Contributor

A new report shows just how profitable ESPN is for The Walt Disney Co.

According to the Hollywood Reporter, “ESPN delivered $16 billion in revenue in fiscal 2022 (the company’s fiscal year ended Oct. 2022), and had profits of $2.9 billion.”

For comparison, Disney’s “entertainment” division, which includes TV networks, streaming, and movie and TV studios, turned a profit of just $2.1 billion.

This profitability explains why Disney is moving ESPN out of the “Entertainment” division and creating its own “Sports” division.

“Breaking out ESPN from the entertainment pack, a decision announced back in February, was one of Iger’s most dramatic moves since he returned to helm Disney nearly a year ago,” Deadline reported.

However, there are strings attached to that profitability.

“The data shows just how much ESPN’s business relies on carriage fees from cable TV providers over advertising,” Axios explained. “ESPN makes up most of the revenue within Disney’s ‘Sports’ segment. Within that segment during Disney’s fiscal year 2022, the majority of revenue came from affiliate fees that cable programmers pay to distribute ESPN ($10.79 billion) versus advertising ($4.4 billion) and subscriptions and other forms of income ($2.1 billion).”

They added, “Carriage fees are becoming tougher for TV networks to negotiate as cord-cutting accelerates, as was made evident by a messy financial dispute between Disney and Charter last month.”

Movieguide® previously reported on the Disney-Charter dispute and new deal:

Disney and Charter Communications have come to an agreement, ending blackouts on Disney-owned channels and allowing Spectrum subscribers to include Disney+ and ESPN+ within their cable subscription plan.

“Our collective goal has always been to build an innovative model for the future,” said Disney CEO Bob Iger and Charter CEO Chris Winfrey in a joint statement. “This deal recognizes both the continued value of linear television and the growing popularity of streaming services while addressing the evolving needs of our customers.”

“We also want to thank our mutual customers for their patience this past week and are pleased that Spectrum viewers once again have access to Disney’s high-quality sports, news and entertainment programming, in time for MONDAY NIGHT FOOTBALL,” the statement continued. 

Disney and Charter added that the deal is “a transformative, multi-year distribution agreement that maximizes value for consumers and supports the linear TV experience as the industry continues to evolve.”

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