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Volume 24 No. 114


Disney 's "massive jump in net income” in Q2 was “lifted by the performance of its media networks, movie studio and theme parks,” according to Daniel Miller of the L.A. TIMES. The company's Q2 net income of $1.51B is “up 32% from a year earlier,” while its revenue rose 10% to $10.55B. Disney's Media Networks Group, which includes ABC and ESPN, posted "an operating income” of $1.86B, up 8%, with revenue rising 6% to $4.96B. Disney “partly attributed the gain in the cable business to increased affiliate revenue for ESPN” (, 5/7). USA TODAY’s Yu & Meier note ad-rate increases at ESPN “helped offset a 40% drop in the operating income of its broadcasting business” (USA TODAY, 5/8). noted before the earnings report that Disney has “thrived on ESPN’s success," and it will “continue to do so in the absence of strong competitors.” ESPN for the last couple of quarters has “faced pressure on its ratings, but has managed to offset it with higher ad pricing.” Disney “will continue to see support from growth in ESPN’s revenues.” ESPN “constitutes roughly 40% to the company’s value,” and was estimated to have brought close to $11B in revenues last year. ESPN’s “true value lies in the high fee per subscriber,” which has “increased from an estimated $3.65 in 2008 to $5.05 in 2012.” The growth in the fee is “likely to slow due to pressure from pay-TV service providers and expected competition from NBC and Fox” (, 5/6).