Disney Unveils ESPN Financials As It Preps Standalone Sports Segment

Jill Goldsmith
·2 min read
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Disney offered a first glimpse under ESPN’s hood ahead of earnings next month when it plans to break out Sports as its own business segment — part of a restructuring initiated by CEO Bob Iger.

The new division saw revenue of $13.2 billion and operating income of close to $1.5 billion for the first nine months of fiscal 2023. In comparison, the entire Entertainment segment, which includes everything but sports, had $31 billion in sales but just $1.2 billion in profits for the same period, according to an SEC filing. That’s an indication of why, starting with its fourth-quarter/full-year earnings report next month, Disney will showcase three new divisions called Sports, Entertainment and Experiences. 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. He’s seeking strategic minority partners for the sportscaster.

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ESPN revenue came mostly from affiliate fees ($8+ billion). Advertising was $3.2 billion and subscription fees $1.1 billion.

Disney provided a few years’ worth of comps. Sports revenue for fiscal 2022 was $17.3 billion, with operting profit of $2.7 billion. In 2021, it was, respectively, at about $16 billion and $2.7 billion.

The Sports segment includes sports-focused global television and DTC video streaming content production and distribution led by ESPN and including its eight ESPN branded television channels, ESPN on ABC, the ESPN+ DTC video streaming service, ESPN branded channels outside of the U.S., and Star-branded sports channels in India.

Star India contributed $637 million in revenue and a $444 million operating loss for the first nine months of 2023, so ESPN alone would have had a profit closer to $1.9 for the first three months of FY 2023.

Experiences (formerly Disney Parks, Experiences & Products) won’t change all that much with revenue of $24.4 billion for the nine months and operating profit of $7.2 billion. One change here is that the division won’t include royalties on merchandise licensing revenues generated on IP created by the entertainment segment, which will get to keep it.

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