Walt Disney Company faced a challenging fourth-quarter earnings call that delivered disappointing news to both investors and streaming subscribers, with shares plummeting nearly 8% amid an ongoing licensing dispute with YouTube TV.
The Streaming Standoff Intensifies
During Thursday's earnings discussion, Disney Chief Financial Officer Hugh F. Johnston revealed the company's firm stance regarding the distribution impasse with the video-sharing platform. "We're ready to go as long as YouTube TV wants to," Johnston stated, according to sports business reporter Joe Pompliano.
The entertainment giant, which controls ABC and ESPN's network portfolio, has failed to reach a new distribution agreement with YouTube TV. The conflict centres on Disney's assertion that YouTube hasn't been paying fair market value for ESPN and ABC content, while the streaming service counters that Disney's demands would force price increases and limit customer choice.
Subscriber Impact and Company Response
The dispute has already had tangible consequences for consumers. Since ESPN and ABC disappeared from YouTube TV on October 30, the platform has offered a $20 credit to its 10 million subscribers affected by the blackout.
An internal memo obtained by The Athletic and signed by Disney Entertainment co-chairmen Dana Walden and Alan Bergman, along with ESPN chairman Jimmy Pitaro, indicates the company's determination to hold out for better terms. The document accused YouTube TV of approaching negotiations "as if it were the only player in the game" rather than competing fairly.
Disney executives emphasised that the company has offered YouTube TV "fair terms that are in line with the more than 500 other distributors" that have renewed agreements since last summer, including larger providers than YouTube TV.
Corporate Performance and Market Reaction
Despite struggles in traditional cable and box office performance, Disney found some relief through its streaming business and theme park operations. Company shares recorded a gain of 73 cents each during the fourth quarter of 2025, though Thursday's earnings call triggered the significant 8% drop.
YouTube TV, which stands as the largest internet television provider in the United States with 10 million subscribers, responded critically to Disney's public statements. A spokesperson accused Disney of resorting to "old tactics like leaking documents to the press" and misrepresenting negotiation facts.
"Our team stands ready to make a fair agreement in line with their deals with other distributors," the YouTube TV representative stated, urging Disney to return to negotiations for the benefit of mutual customers.
The streaming landscape continues to evolve rapidly, with Disney's Hulu ranking as the second-largest internet TV provider in the US, though with approximately half the subscriber base of YouTube TV.
