ESPN Expands with NFL, WWE Deals as Disney's Profits Rise

Major Deals and Strong Financial Performance

Disney's ESPN has made significant moves in the sports media landscape, entering into two landmark agreements as its parent company reported robust financial results for the fiscal third quarter. These developments come alongside strong performance from Disney's streaming services and domestic theme parks.

One of the most notable deals involves the NFL. The league announced a nonbinding agreement with ESPN, under which ESPN will acquire NFL Network, NFL Fantasy, and the rights to distribute the RedZone channel to cable and satellite operators. In return, the NFL will receive a 10% equity stake in ESPN. However, the deal still requires final negotiations and approval from NFL owners, along with regulatory clearances.

"Sometimes great things take a long time to get to the point where it's right. And we both feel that it is at this stage," said NFL Commissioner Roger Goodell in a call with The Associated Press. Additionally, the NFL and ESPN have entered into a second nonbinding agreement, allowing the league to license certain content and intellectual property to ESPN for use on NFL Network and other assets acquired by the network.

In another major development, The Walt Disney Company announced a landmark rights agreement with ESPN and the WWE. As part of this deal, ESPN platforms will become the exclusive U.S. domestic home of all WWE Premium Live Events, including "WrestMania" and "SummerSlam," starting in 2026. This partnership is expected to enhance ESPN's content portfolio and support its streaming initiatives.

"This agreement, which features the most-significant WWE events of the year, bolsters our unprecedented content portfolio and helps drive our streaming future," said Jimmy Pitaro, chairman of ESPN. Mark Shapiro, president and COO of TKO Group Holdings, the parent company of WWE, added that WWE Premium Live Events align with ESPN’s commitment to rich storytelling and cultural experiences.

Strong Financial Results

Disney reported impressive financial results for the quarter ending June 28, with earnings reaching $5.26 billion, or $2.92 per share, compared to $2.62 billion, or $1.43 per share, a year earlier. Excluding certain items, earnings were $1.61 per share, surpassing analysts' expectations of $1.46 per share.

Revenue totaled $23.65 billion, slightly below Wall Street's forecast of $23.68 billion. Despite this, the direct-to-consumer segment, which includes Disney+ and Hulu, posted operating income of $346 million, up from a loss of $19 million a year ago. Revenue for this segment increased by 6%.

Disney+ saw no change in paid subscribers domestically, but there was a 2% rise internationally. Total paid subscribers reached 128 million, up from 126 million in the previous quarter. Combined subscriptions for Disney+ and Hulu reached 183 million, an increase of 2.6 million from the second quarter.

Looking ahead, Disney anticipates a more than 10 million increase in total Disney+ and Hulu subscriptions in the fourth quarter, with most of the growth expected from Hulu due to the expanded Charter deal. The company also plans to stop reporting the number of paid subscribers for Disney+, Hulu, and ESPN+ starting in fiscal 2026, citing that the metric has become less meaningful for evaluating business performance.

Hulu and Disney+ will be combined into one app next year, according to Disney.

Growth in Parks and Experiences

The Experiences division, which includes Disney's six global theme parks, cruise line, merchandise, and video game licensing, reported a 13% increase in operating income to $2.52 billion. Domestic parks saw a 22% rise in operating income, while international parks experienced a 3% decline.

Disney announced in May that it will build a seventh theme park in Abu Dhabi. CEO Bob Iger stated, "We have more expansions underway around the world in our parks and experiences than at any other time in our history." He emphasized the company's ambitious plans for the future.

For fiscal 2025, Disney raised its adjusted earnings forecast to $5.85 per share, up from $5.75 per share. Analysts expect full-year earnings of $5.80 per share.

Leadership and Succession Planning

As Disney continues to manage its diverse business segments, it is also working on finding a successor to CEO Bob Iger, who has been a central figure in the company for most of the past two decades. A succession planning committee was created in 2023, with the search gaining momentum last year when Morgan Stanley Executive Chairman James Gorman was enlisted to lead the effort.

Iger has agreed to a contract extension that keeps him at the company through the end of 2026. The company is considering internal and external candidates for the role, with internal names including ESPN chairman Jimmy Pitaro, Walt Disney Parks and Resorts Chairperson Josh D'Amaro, and Disney Entertainment Co-Chairmen Alan Bergman and Dana Walden.