International heavyweight sports broadcaster ESPN saw its US operating income rise 16% year-on-year (YoY) in its fourth fiscal quarter (Q4),
Disney-owned ESPN secured operating income of $987 million in the three months up to September 30. Its revenue also rose YoY in the fourth quarter, from $3.78 million to $3.81 million.
In terms of operating income across both US and international parts of ESPN, that figure came to $953 million.
The ESPN+ streaming service also made a profit of $33 million in Q4, as opposed to the other streaming services run by Disney - Disney+ and Hulu - which between them lost $420 million.
ESPN’s rising income stands in contrast to a fall in revenue across Disney’s other linear networks of 9%.
In an interview earlier this week, Disney’s chief executive Bob Iger said, on ESPN: “It’s on a great trajectory, and the ratings are actually very strong, too. ESPN had one of the strongest years rating-wise, I think, in the last four or five years.
“We obviously are planning to take ESPN out on a direct-to-consumer [DTC] basis. We feel great about that.”
The decision to split ESPN out of Disney’s entertainment pack was announced by Iger in February, in order to attract investment in the sports broadcaster.
Disney owns 80% of ESPN while media company Hearst Communications holds the remaining 20%.
ESPN’s DTC offering will launch no later than 2025, Iger has now said.
ESPN holds rights to several major US sports leagues including American football’s NFL, basketball’s NBA, ice hockey’s NHL, and baseball’s MLB.
In July, it was reported that Disney was considering bringing a major US sports league on board as a minority investor for ESPN and that talks had been held with the NFL, NBA, and MLB.
The sports broadcasting powerhouse also has a vast soccer portfolio with rights to Spain’s top-flight LaLiga, Germany’s Bundesliga, the Dutch Eredivisie, England’s EFL Championship, and the FA Cup and League Cup competitions.
ESPN has been a staple in not only Disney’s cable television networks but also in its traditional entertainment bundle, which demands some of the highest fees from subscribers.
These financial results were the first from Disney to be split out into three new divisions - sports, entertainment, and experiences - to reflect the sporting assets soon being split out.
Previously, ESPN’s results were combined with all of Disney’s other linear TV and streaming assets or included with other television properties including network ABC and Disney’s cable channel, making it difficult to get a clear financial picture of the broadcaster alone.
Disney has said that the higher domestic ESPN operating income was primarily due to growth in ESPN+ subscription revenue, a decrease in programming and production costs, lower marketing costs, and “a modest increase in advertising revenue."
At the end of the fourth quarter, the ESPN+ paid-subscriber levels were at 26 million, as opposed to 25.2 million at the end of Q3.
