Disney's Big Bets on Sports and Streaming

Disney is making some big moves in the world of sports and streaming. The company just shared its latest financial results, showing a 2% increase in revenue to $23. 7 billion and an 8% increase in operating income to $4. 6 billion. This growth is partly thanks to its plans to launch a new streaming service focused on ESPN and a major deal with the NFL. The NFL deal is a big one. It gives the NFL a stake in ESPN and includes streaming rights for major WWE events like WrestleMania. This is part of Disney's push to grow its streaming business, which saw a 6% increase in revenue to $6. 2 billion. Disney also added 2. 6 million new subscribers to Disney+ and Hulu, mostly from international markets. Disney's CEO, Bob Iger, talked about how combining Disney+ and Hulu will make the user experience better and help keep subscribers longer. He also mentioned that Disney is experimenting with different features to see what works best. The company is focusing on growing its international business rather than increasing content spending domestically. While Disney's entertainment division saw a 1% increase in revenue to $10. 7 billion, its operating income fell by 15% due to declines in linear TV networks. However, the experiences division, which includes theme parks and cruises, saw an 8% increase in revenue to $9. 1 billion. This growth was driven by higher spending at U. S. parks and the expansion of the Disney Cruise Line. Disney is also planning to launch its first cruise ship in Singapore, the Disney Adventure, later this year. Iger sees this as a great opportunity to expand the Disney brand in Asia. In sports, revenue fell by 5% to $4. 3 billion, but operating income rose by 29% to $1 billion. The NFL deal was a big topic on the earnings call. Iger highlighted the economic benefits, including increased revenue and operating income for ESPN. He also mentioned that the deal could help lower churn rates for the ESPN app and bring in more advertising revenue. Disney has adjusted its guidance for fiscal 2025, now expecting an adjusted EPS of $5. 85, up from $5. 75 last quarter, and targeting direct-to-consumer operating income of $1. 3 billion.