Disney, already in a brutally bad financial position thanks to its past few movies being woke box office disasters, is getting yet more bad news from what should be one of its better segments: sports. There, ESPN failed to come to terms with cable provider Spectrum, and so now tens of millions of Americans don’t have Disney-owned channels on the television and Disney is losing over a billion dollars a year as a result.
The dispute was between Charter Communications, which has 14.7 million video subscribers through Spectrum, and Disney. It went unresolved and so, on August 31, 19 different Disney-owned cable channels went dark. That included ESPN, which was cut off for Spectrum cable subscribers right before the Thursday night kickoff.
All ESPN networks just went black on Spectrum. Guess a bluff was called.
— Timothy Burke (@bubbaprog) September 1, 2023
The ESPN cut is particularly painful for Disney, as a recent report found that the ESPN channels going dark is costing Disney over $125 million every single month, which means it is losing about a billion and a half dollars annually over the failure to ink a deal with Charter Communications, not even including the non-ESPN channels.
That report came from Cord Cutter News, which noted that, thanks to ESPN, Disney currently makes about $9 a month for every cable TV customer. That works out to about $126 million a month with the 14,071,000 cable customers it just lost because a deal wasn’t struck, which works out to $4 million a day or $1.4 billion every year.
Cord Cutter News adds that Spectrum pays Disney $2.2 billion annually in programming costs, so the non-ESPN channels presumably would make it, from Spectrum, about $800 million a year. It is losing out on that revenue as well because a deal was not struck.
This latest body blow to Disney comes alongside the woke entertainment company’s plans to slash $5.5 billion in operating costs by cutting a whopping 7,000 jobs across its divisions. As the failure to find a way forward with Spectrum was recent, the company has not said if it will cut more jobs to make up for the millions lost every day on that front.
Further, it is unclear whether the ESPN failure could change Iger’s thinking about the network and where it stands relative to Disney’s other TV brands. Previously, he had said that the other channels are “non-core” to Disney, but Disney later added that ESPN was not included in that analysis. Now, if ESPN is costing Disney millions, he could change his view about it.
Speaking about the other TV networks Disney currently owns, such as ABC and National Geographic, Iger said, “We have to be open-minded and strategic about the future of those businesses. They may not be core to Disney. The creativity and content they create is core to Disney, but the distribution model, the business model that forms the underpinning of that business, and that has delivered great profits over the years, is definitely broken. And we have to call it like it is. That’s part of the transformative work that we’re doing.”
Leave a Reply