Disney Reveals ESPN Profitability, Revisiting ESPN’s Valuation, NBA Looking For Streaming Partners

Hello everyone.

Tech earnings season has begun. The game plan is to begin going over the most interesting reports related to Apple next week. For today, we will go into the sports world as Disney broke out ESPN’s financials for the first time. This will then bring us to reporting that pegs the NBA as wanting to partner with tech companies for its upcoming media-rights auction. Let’s jump in.

Disney Reveals ESPN Profitability

Here’s the WSJ:

“Profits from Disney’s sports segment, home to ESPN, declined 20% in the first nine months of its fiscal year, according to a new filing Wednesday that offers a clearer look at the toll cord-cutting is taking on the business.

Operating income for the newly reported sports segment fell to $1.48 billion in the nine months ended July 1, while revenue declined 1.3% to $13.2 billion. The unit includes ESPN and related channels, Disney’s ESPN+ streaming service and Star-branded sports channels in India.

Profits from ESPN-branded TV networks, ESPN programming on the ABC network and ESPN+ fell 7.8% to $2.06 billion in those nine months. The company shared more-detailed financial results for the business as it seeks a potential strategic partner to help shape the future of ESPN’s content and distribution.”

One reason Disney is making this financial disclosure change is to separate struggling businesses, such as linear networks, from what Disney views as its growth engines. It’s along the same general idea of Alphabet separating Other Bets losses from Google proper. The change in disclosure will also streamline Disney’s talks with potential suitors and partners regarding asset sales and divestures.

Within the new Disney Sports segment, the company includes various sports-related businesses and segments into one.

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The Case for More Durable Apple Watch Ultra Bands, Disney Planning Standalone ESPN Offering

Hello everyone. The daily updates return with a post-Memorial Day update focused on some of Neil's thoughts about Apple Watch bands. We then turn to news on the Disney streaming front.

The Case for More Durable Apple Watch Ultra Bands

Apple is no stranger to selling higher-priced Apple Watch bands. Over the years, Apple has sold more than 620 bands, ranging from the entry-level $49 Sport Band and Solo Loop to the $99 Milanese Loop and $339+ Link Bracelet.

Throughout Apple Watch’s history, higher-priced Apple Watch brands have been associated with luxury and fashion, not additional utility. For the Apple Watch launch in 2015, Apple sold exclusive Link Bracelets for Apple Watch Edition. The Hermès partnership, now in its eighth year and centered around the company’s leather expertise, includes high-priced bands with the top one currently going for $849.

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Disney CEO Talks ESPN’s Future, Apple’s Sports Play, Apple Watch Ultra Reviews (Daily Update)

Hello everyone. Let's begin today's update in the live sports world.

Disney CEO Talks ESPN’s Future

Last week, Disney CEO Bob Chapek, who recently had his CEO contact extended by three years, sat down with CNBC’s David Faber to talk about ESPN and where live sports goes from here.

Here’s Chapek:

“We're hard at work in our offices, both on the east coast and the west coast, figuring out how we make it more friction-free sports environment for our viewers. And obviously, some of these things take the cooperation of a lot of the people in the ecosystem, whether they be the leagues, other broadcast partners, but we foresee a world where ESPN, even more than ever, is the pinnacle of all your broadcast needs and we’re excited to continue working on that and at some point, when we’re all fully backed, we’ll come back.”

Chapek referred to four broad working areas as to where Disney is focusing ESPN's energy:

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