ESPN Has Earned HOW Much???
The Walt Disney Company just took an unusual step.
As part of an SEC filing, Disney revealed how much ESPN earns.
Photo: ESPN
In the process, Disney has pulled back the curtain on one of its greatest mysteries. Here’s what just happened and why.
The Filing
Photo:impulsecreative.com
Last month, Disney filed the paperwork to expand theme parks
In layperson’s terms, the difference between Disney saying it will do something and actually doing it comes down to paperwork.
Anybody can say they’ll do anything. However, when a publicly traded company performs an SEC filing, that’s a declaration of intent.
Photo: GETTY IMAGES FOR ESPN
Now, you’ve promised the federal government that what you say is true. And that’s what Disney just did with ESPN. Disney has taken the unusual step of posting its revenue.
In August, MickeyBlog covered two seemingly contradictory stories. Both involved a potential sale of an ESPN ownership interest.
One interested buyer was supposedly Amazon, while another was Verizon. As I’ll explain in an upcoming article, each deal remains a possibility.
Photo: Arne Beruldsen/Shutterstock spiderman777/Shutterstock (Licensed) Remix by Jason Reed
Nobody on Wall Street had believed either story because investors and analysts remained unconvinced that Disney wants to sell any part of ESPN.
Disney has earned tens of billions of dollars from ESPN over the years, and that’s with Hearst Communications owning 20 percent.
Photo: ESPN
Should Disney sell another stake in ESPN, it’d reduce its revenue that much more in an industry that’s already struggling.
That’s been the Wall Street presumption for a while. But this SEC filing changes everything.
For the first time in ages, Disney is telling the world how much ESPN earns rather than leaving the subject up to speculation.
How Much Does ESPN Make?
According to this SEC filing you can find on Disney’s Investor Relations website, ESPN has earned $13.2 billion during the first nine months of fiscal 2023.
In a couple of weeks, Disney will announce its full fiscal 2023 performance, but it didn’t want to delay the publication of the ESPN data.
Photo: Deadline
So, something could feasibly be up here, as Disney could have just easily waited until November 8th. The fact that it didn’t is…odd.
Anyway, this data suggests that ESPN has lost 1.3 percent in revenue from the same timeframe in 2022, which is rather trivial.
More alarmingly, Disney’s profit margin on ESPN has fallen by 20 percent.
Photo: Disney
Presumably, that’s due to a combination of cord-cutting cable subscribers reducing carriage fee income and higher sports broadcast licensing rights.
For fiscal 2022, ESPN grossed $17.3 billion with a net income of $2.71 billion. During the first nine months of fiscal 2023, ESPN has netted $1.48 billion.
Photo: ESPN
Extrapolating that for three more months, ESPN would gross $17.6 billion for the full fiscal year, and it would claim a net income of just under $2 billion.
In other words, Disney is warning potential investors and business partners that ESPN’s profits are dropping. That’s why it would like new business partners.
Photo: ESPN
By any reasonable business measure, ESPN remains a highly profitable venture relative to its operating expenses. It’s just becoming less lucrative.
A Bloomberg Intelligence analyst, Geetha Ranganathan, evaluated Disney’s newly released ESPN information and determined its current value.
Photo: Disney/ESPN
As a business, Ranganathan estimates that ESPN is worth $22 billion.
Disney’s 80 percent ownership percentage of that would amount to a bit under $18 billion.
A recent report suggests that Disney could sell 10 percent to a new investor or, in a perfect world, two of them.
Credit: Disney
That’s why the Apple and Verizon rumors aren’t mutually exclusive.
Disney may be ready to sell nearly half of the ESPN pie as a means of expanding its profit potential.
Photo: MickeyBlog
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