Disney’s $24 billion in planned content spend for fiscal 2026 will likely end up being a roughly 50-50 split between sports and entertainment, chief financial officer Hugh Johnston said on Wednesday.
“I think that mix is likely to hold reasonably well,” Johnston told Wells Fargo’s Technology, Media, and Telecom Summit, though he noted entertainment spend “may grow a little faster than sports.” He also said that the company would look to invest more in local content in certain markets in order to keep engagement and subscriber retention high.
“We’re obviously evaluating those market segments and allocating based on where we think the growth may be. But there’s also an element to it of where are the best ideas coming from,” Johnston said. “I’ve often said money does not attract ideas, ideas attract money. So in a lot of ways, with the storytelling we do, it’s really where the best ideas come from, and the judgment of our operating executives in the entertainment business to allocate the capital based on where they think we’re likely to have the highest level of success.”
While Disney’s total content budget will continue to grow over time, Johnston emphasized it wouldn’t hit levels when the media giant and others were “overproducing” original content. In fiscal 2022, Disney’s content budget was $33 billion.
“We weren’t happy with some of the quality because we were pushing so hard to produce content,” he said. “I think we’ve got it dialed in pretty well right now.”
Johnston also said its content expenses would grow “substantially slower” than Disney’s direct-to-consumer revenue, which he hopes will see double-digit growth in the years to come.
During its fourth quarter of 2025, Disney+ and Hulu saw their combined profit grow 39% to $352 million, while streaming revenue grew 8% to $6.25 billion.
Disney+ and Hulu added a combined 12.4 million subscribers for a total of 195.7 million. Disney+ added 3.8 million subscribers for a total of 131.6 million. Hulu added 8.6 million for a total of 64.1 million, largely driven by the company’s expanded distribution deal with Charter Communications.
“The goal first was to achieve scale, and we did do that,” Johnston said Wednesday. “That said, there’s still opportunity to expand on that sub base.”
Disney+ will become a “portal” for how consumers “interact in any way” with the media giant, he said, echoing previous comments made by CEO Bob Iger. He also sees opportunities for Disney+ in gaming and commerce.
The teams at Disney+ and Hulu are also “working double-time” on the service’s unified app experience in 2026, which the company hopes will reduce churn and increase subscriber retention.
“More than anything, we just need to get the technology. It’s getting the product right,” Johnston said.
In addition to Disney+ and Hulu, the media giant launched ESPN Unlimited in August. Johnston said Disney leadership has been “very, very happy with the start” and that “the numbers are off to a very good start,” but declined to disclose specific subscriber numbers. (Executives said during its fourth quarter earnings that 80% of the service’s sign-ups have been through Disney’s trio bundle.)
Johnston also reiterated that Disney doesn’t have a need for “major M&A” or additions to its portfolio of IP as a Thursday deadline looms to submit bids for all or part of Warner Bros. Discovery. Netflix and Comcast have been exploring bids for Warner’s studios & streaming business, which will separate from its linear networks business in April, while Paramount has submitted multiple bids for the entire company that were rejected for being too low.
“We’re really very happy with the portfolio as it exists right now. So I guess we’ll watch what happens with everyone else, but we feel good about where we are,” Johnston said on Wednesday, though he noted Disney remains open to smaller opportunities for “tuck in” acquisitions, such as its $1.5 billion stake in Epic Games.
Looking ahead, Disney expects double digit earnings per share growth in fiscal year 2026 and 2027. It also anticipates $19 billion in cash provided by operations and $9 billion in capital expenditures in fiscal 2026. Additionally, it is doubling its share repurchase target to $7 billion. The board has declared a dividend of $1.50 per share, payable in two installments on Jan. 15 and July 22, 2026.
In the first quarter of 2026, Disney is expecting a streaming profit of $375 million, adverse impacts of $400 million due to theatrical slate comparisons and higher costs, including marketing for “Avatar: Fire and Ash,” and $73 million from Star India, and lower political ad revenue of $140 million.
For full year 2026, Disney expects double-digit entertainment profit growth weighed to the second half of the year and a streaming operating margin of 10%. It also expects low-single digit sports profit growth weighted to the fourth quarter due to the timing of rights expenses, which will hurt the second and third quarters.
