Disney has disclosed that ESPN suffered a $110 million decline in operating income during the 15-day YouTube TV blackout last autumn, far exceeding earlier estimates. The blackout, which began on 30 October and ended on 14 November, resulted from a carriage fee dispute between Disney and Google.
Wall Street analysts had initially estimated Disney was losing about $4.3 million per day, but Disney’s earnings report revealed the impact on ESPN alone amounted to over $7 million daily. ABC and other Disney entertainment networks also saw revenue drops, though the company did not quantify those losses.
Disney CFO Hugh Johnston noted on the company’s earnings call that while the blackout cost money, it generated incremental revenue from subscribers who moved to other platforms, such as ESPN’s direct-to-consumer service. However, Disney has not disclosed subscriber numbers for ESPN Unlimited, which launched in August.
For the year-end quarter, ESPN’s total revenue was $4.9 billion, up 1%, but operating income fell 23% to $191 million, driven by higher programming costs and the loss of affiliate fees from YouTube TV.
Separately, Disney and the NFL finalised a deal giving the NFL a 10% stake in ESPN in exchange for control of NFL Network and NFL RedZone through 2033. Disney now holds an effective 72% interest in ESPN, with Hearst owning 18% and NFL Enterprises 10%.
