This is pretty fascinating.

Disney reveals size of ESPN's biz for the first time

TLDR: ESPN is expensive and smaller than Disney but probably more profitable than it's been made to sound, but most of that profit comes from carriage fees.

Quote:

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By the numbers: ESPN delivered more than $16 billion for Disney's fiscal year 2022 (which ended on October 1, 2022) and $2.9 billion in profit. The vast majority of that income came from its domestic business.

• By comparison, Disney's entertainment business, which includes its streaming services, linear TV networks and TV and movie studios, brought in $39.6 billion in revenue and $2.1 billion in profit during that same time period.

Yes, but: The data shows just how much ESPN's business is reliant on carriage fees from cable TV providers over advertising.

• ESPN makes up most of the revenue within Disney's "Sports" segment. Within that segment during Disney's fiscal year 2022, the majority of revenue came from affiliate fees that cable programmers pay to distribute ESPN ($10.79 billion) versus advertising ($4.4 billion) and subscriptions and other forms of income ($2.1 billion).

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Interesting to see the breakout of affiliate fees/ads/subscriptions. As much as everyone wants to complain about all the streaming options increasing their prices, it's pretty obvious that they've all been money sinks in the search for having a bigger subscriber base. Saw some other rumors yesterday that with ESPN and WBD not willing to spend a whole lot for NBA rights, they'll just buy less games and that would give the NBA a lane to partner up with Amazon or Apple to give them an NBA package as well.

Apple has apparently made a $2 billion dollar bid for exclusive F1 rights, though I can't imagine that's as pricey a package as a major market US sport would be.

I can see a scenario where some of these properties get snapped up by other distributors/streamers and ESPN starts to specialize in certain areas.

Yeah I think it'll be much like the NFL Thursday night game they used to give the NFL network a benchmark to build around, then wound up spinning that off into a package of its own. They could easily bundle some sort of streaming package to Amazon/apple especially if they include league pass. ESPN as a brand still has a lot of cache and it always will but I think the time is coming for some unique opportunities there. If WBD and ESPN don't have such a large package of games (numbers I saw said between TNT and ESPN they've run 165 games) then the NBA can create whatever package is left around that + do something the way you can watch NHL games via espn+ even if they're on Bally or some other regional. Precedent is there even for the NBA, for the longest time Turner Sports ran a lot of the NBA online presence.

I wonder what the profit as a % of revenue looked like 5 years ago.

Yup, totally with you.

Apple's MLS coverage is another great example, I think that's the first semi major league they could acquire rights for and to their credit coverage has been outstanding. F1 is a very logical next step there, rapidly growing sport in the US with so much potential for leveraging cool tech for different cars, teams, etc.