Is Disney's Secret Weapon About to Backfire?
ESPN has gone from being a workhorse to an albatross at Disney (NYSE: DIS), but there is -- or at least was -- a chance that the world's leading sports programming network could deliver strong operating earnings growth when the media giant needed it the most. ESPN could've been the secret weapon that helps Disney offset the weakness at its currently shuttered theme parks and its studio entertainment arm with no open movie theaters to distribute its films.
The bullish case for ESPN is that, with sports leagues around the world canceled and folks still paying full price for the cable network, Disney would be scoring juicy margins for its sports programming empire. ESPN doesn't have to pay for games that aren't played, and the network has relied on documentaries, talk shows, and replaying classic games as ways to fill the void. However, now cable and satellite television providers are starting to ask for a rebate from ESPN. At least one attorney general is asking that the pay-TV companies pass along those potential savings to consumers. It's quite possible that the ESPN tailwind of the past six weeks could be a headwind in the very near future.
The set of the Mike & Mike show on ESPN. Image source: ESPN.
Source Fool.com
