The Walt Disney Company’s (DIS) ESPN remained a worry for investors in 2015. ESPN is part of the company’s Media Networks segment. A significant component of the Media Networks segment’s revenues is affiliate fees and advertising revenues.
Affiliate fees are under increasing pressure due to pay-TV operators’ loss of subscribers. Subscriber losses are a worry for ESPN because, according to the contractual agreements with its distributors like Dish Network (DISH), affiliate fees are amended if subscribers drop below a certain level.
Disney’s ESPN earns much of its advertising revenues through sports programming, especially live sports. Disney had stated in its fiscal 3Q15 earnings call that 96% of all sports programming is live.
As the chart below indicates, ESPN lost 3 million subscribers from fiscal 2014 to fiscal 2015. In fiscal 2015, ESPN had 92 million subscribers, down from 95 million subscribers in fiscal 2014.
View more information: https://marketrealist.com/2016/01/disneys-espn-kept-struggling-2015-subscriber-losses/