1、1 https:/ Capital Inc.and/or one of its affiliates does and seeks to do business with companiescovered in its research reports.As a result,investors should be aware that the firm may have aconflict of interest that could affect the objectivity of this report.Investors should consider thisreport as o

2、nly a single factor in making their investment decision.Please see analyst certifications and important disclosures beginning on page 9.Walt Disney CoHow could ESPN streaming impactDisney financials?ESPNs streaming service should help more than offset lineardeclines and potentially contribute to ear

3、nings growthDisneys recent ESPN streaming launch is another significant structural shift in the industrygiven that 80%of the top 100 most viewed shows are sports events,with Disney accounting for40%+of total sports tonnage on legacy networks(please see Contextualizing sports tonnageand costs,19 Aug

4、2025).Disney has further enhanced its go-to-market advantage by becoming abundler of sports from others like Fox.Unlike general entertainment,sports content availabilityis capped irrespective of distribution form,which means that there is more potential forstreaming to be directly cannibalistic for

5、linear networks.Therefore,the impact of streaming onaggregate earnings is not necessarily obvious despite Disneys scale.In order to understand this,we try to perform a sensitivity analysis to estimate the breakevensuccess levels needed for sports streaming to be accretive to Disney.In order to do th

6、is analysis,we make the following simplifying assumptions,which are deliberately conservative to stresstest the viability of the model:We use Disneys reported sports segment affiliate revenue to estimate an affiliate fee per subper month of$13.When combined with advertising,revenue generated on line