ESPN Is a Disney Crown Jewel, but Its Financials Demand ‘Drastic Pivot’ to Direct-to-Consumer | Analysis

The sports network generated $1.89 billion operating profit in the first 9 months of fiscal 2023, but cord-cutting and escalating costs for sports rights are weighing on growth

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Disney’s disclosure last week that ESPN generated $17.3 billion in revenue last year — 21% of the entertainment giant’s $82.7 billion total — showed that the sport network remains a crown jewel for the company. But ESPN’s standalone financials highlight the urgency for Disney to make an aggressive direct-to-consumer pivot for the legacy network, analysts told TheWrap.

ESPN has lost 19% of its pay-TV subscribers since 2018, and sports rights remain its biggest expense at about $9 billion in 2023, Bloomberg Intelligence analyst Geetha Ranganathan said in a Friday note to clients that this cost was up more than 20% from about $7.3

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