DIS

Movies and series are not the only sources for income for streaming services. One of the major sources is the broadcasting of sport events. All major streaming platforms are now struggling to get the rights to broadcast the NFL Sunday Ticket. Apple has offered $3 billion for it while Disney and Amazon are left behind with a $2 billion bet. Google has recently joined the competition to take over the broadcast from Youtube.

Nevertheless, Disney made other significant deals to broadcast sports like a $2.7 billion contract with Monday Night Football, contracts with La Liga football, and NHL for another $0.6 billion a year. Disney has more contracts to broadcast more than 22,000 sport events for its ESPN+ channel. And that costs a bulk of money. Disney has raised monthly ESPN+ subscription by $3 to $9.99 compared to $5.99 in 2020 and $4.99 in 2018. Another subscription price hike may stimulate users to switch to the Disney Bundle service that includes Disney+, Hulu and ESPN+. ESPN+ itself generates $4.73 per client, only 4% up compared to 2021. Thus, promoting clients to the larger service could be justified, and may add $72 per client a year. The problem is that a further increase of the cost could not be as successful as the monetisation potential, which is rather limited. The increase of the Disney Bundle subscription cost may churn clients to move to cheaper Disney+ or ESPN+ subscriptions. The company received $4.9 billion in subscription revenues in Q2 2022 with a net operational loss of $0.9 billion. Expensive sport broadcasting licenses is the major reason for such a loss. ESPN+ itself generates $110 million a month but this is  not enough to cover licenses fees, even together with advertising revenues. Other streaming giants are generating massive cash flows which they can spend on their development. So, market positions of Disney may suddenly become less sustainable than traditionally considered.