Disney’s latest quarterly results were once again dinged because of ESPN’s struggles.
The company’s Cable Networks division’s revenues fell 2% to $4.4 billion and operating income decreased 11% to $0.9 billion. Disney pinned the decrease in operating income on ESPN.
Specifically, ESPN was impacted by higher programming costs and lower advertising revenue, but received a partial boost from affiliate revenue growth. ESPN’s results were hurt by rate increases for NBA and NFL programming. Sinking advertising revenue was due to lower impressions and rates, which Disney said occurred partly because of a shift in the scheduling for some College Football Playoff games.
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Meanwhile, ESPN’s lower impressions were due to a decrease in average viewership and the network’s affiliate revenue growth came because of contractual rate increases.
Operating income for Disney’s other cable networks was essentially flat.
The same can be said for Disney’s broadcasting revenues, which remained at around $1.8 billion. But the segment’s operating income jumped 28% to $379 million on the strength of affiliate revenue growth and decreased programming cost write-downs for network programming.
Disney also saw investees’ equity income decrease 16% to $119 million during the quarter due to lower equity income from A+E Television Networks and equity losses from BAMTech, which the company bought in August 2016. A+E was impacted by lower advertising revenue and higher programming costs.
In all, Disney’s revenues fell 3% to $14.78 billion and net income plummeted 14% to $2.48 billion. Still, Disney CEO Bob Iger seemed confident in the road ahead.
“With our proven strategy and unparalleled collection of brands and franchises, we are extremely confident in our ability to continue to drive significant value over the long term,” Iger said in a statement.