ESPN saw revenue of $13.2 billion and operating income of close to $1.5 billion for the first nine months of fiscal 2023, Disney revealed ahead of earnings next month when it plans to break out Sports as its own business segment — part of a restructuring initiated by CEO Bob Iger.
In comparison, the entire Entertainment segment, which includes everything but sports, had $31 billion in sales but just $1.2 billion in profits for the same period, according to an SEC filing. Its an indication why, starting with its fourth-quarter/full-year earnings report next month, Disney will showcase three new divisions called Sports, Entertainment and Experiences. Breaking out ESPN from the entertainment pack, a move announced back in February, was one of Iger’s most dramatic moves since he returned to helm Disney nearly a year ago. He’s also seeking strategic minority partners for the sportscaster.
ESPN revenue came mostly from affiliate fees ($8+ billion). Advertising was $3.2 billion and subscription fees $1.1 billion.
Disney provided a few years’ worth of comps. ESPN revenue for fiscal 2022 was $17.3 billion, with operting profit of $2.7 billion. In 2021, the numbers were $15.9 billion and $2.7 billion, respecitvely.
The Sports segment includes sports-focused global television and DTC video streaming content production and distribution led by ESPN and including its eight ESPN branded television channels, ESPN on ABC, the ESPN+ DTC video streaming service, ESPN branded channels outside of the U.S., and Star-branded sports channels in India. (Star India contributed $637 million in revenue and a $444 million operating loss for the first nine month sof 2023.)
Experiences (formerly Disney Parks, Experiences & Products) won’t change all that much with revenue of $24.4 billion for the nine months and operating profit of $7.2 billion. One change here is that the division won’t include royalties on merchandise licensing revenues generated on IP created by the entertainment segment, which will get to keep it.