The Smartest Disney -Investors are watching this 1 massive development

On February 11, 2025By Littum

Walt Disney (Sneezing: dis) reported better than expected financial results for its fiscal 2025 first quarter (ended December 28, 2024). Revenue and diluted earnings per Share increased 5% and 35% respectively.

The headline numbers get all the attention. But it is best not to forget how Disney places itself a future dominated by streaming video entertainment. The management just provided more information about what is coming.

The smartest Disney Stock Investors keep an eye on this one massive development.

Once again, Disney’s leadership team repeated that the company launched its highly expected ESPN streaming service in the fall, called “Flagship.” This will deviate a lot from the current ESPN+ offer, which has 24.9 million subscribers. It also demonstrates management’s focus on being a sports media magic, even after the proposed Venu Sports Service fell apart.

Despite Disney’s traditional cable TV networks dealing with a continuous decline, ESPN has stayed thanks to healthy advertising revenue and affiliated fees. Households continue to cut the cord. But for those who are left, sports are arguably a popular move and the commitment remains strong.

The hope is to translate this success into a streaming world. The upcoming ESPN app will be offered as an independent service. But it can also be gathered with Disney+ and Hulu in a way that can be displayed in a “one-app experience.”

CEO BOB IGER is extremely optimistic that this new service resonates strongly with sports fans. He mentioned that because it is a direct-to-consumer app, the platform can be personalized to each customer’s favorite sports team, for example. There will also be exciting capabilities, such as imagination and betting.

While the management has not thrown away from hiping this new service, there has been no comment on pricing. “We want to become really smart and strategic about pricing,” Iger said.

Of course, the overall goal is to maximize revenue while it makes this as many households as possible.

Given that flagship is likely to show Disney’s unmatched sports rights with games from NBA, NFL and NCAA College Football, for example, I would imagine this has Prices.

The leadership team has also not provided any details of their financial expectations of the new ESPN flagship -app. Sales projections, subscriber estimates and a path to profitability are left to investors’ imagination. Nevertheless, it is difficult to claim that ESPN is not extremely valuable.

Disney owns 80% of ESPN. It is difficult to put a value on this.

On the one hand, it is not awe to generate $ 1 billion in annual operating income by a 5% margin for the sports segment. But on the other hand, having rights to major sport leagues that are locked, as well as the expertise when it comes to productions before and after the game, documentaries, other content and relationship with media staff, ESPN makes the top destination for sports fans.

Big Tech companies Apple. Amazonand AlphabetIn addition to streaming pioneer NetflixAll TV sports to their large audience. None of them have anything close to what Disney does with ESPN.

It is a fun exercise to try to find out what these deeply pocketed companies would pay to acquire ESPN to strengthen their sports ambitions. Would It’s $ 50 billion or $ 100 billion? I have no idea, but I’m sure it’s a massive sum, especially when you consider how much ad revenue is to do.

Disney’s smartest shareholders are very aware of detailed details until the launch of the flagship. After it is introduced, it is critical for investors to understand how the service works, especially around subscriber growth at first.

Disney’s ability to make money from ESPN, the most powerful brand in sports media, in a streaming world will be the key to the company’s success. Later in the year, investors will see a step in that direction.

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The Smartest Disney -Investors are watching this 1 massive development was originally released by The Motley Fool