Amid somewhat weak financial results, Walt Disney says it will launch an ESPN streaming service next year.
As part of its widely anticipated effort to start the ESPN streaming service, Disney said it would buy another 42% of the BAMTech streaming platform for $1.6 billion -- after buying one-third of the company for $1 billion last year.
The news comes as part of Disney’s fiscal third-quarter earnings -- revenue was virtually flat at $14.2 billion, with net income down 9% to $2.5 billion.
Disney’s cable networks had 3% lower revenues to $4.1 billion — with a 23% decline in operating income to
$1.5 billion. Lower advertising revenues at ESPN are one major factor in the revenue decline, offset by affiliate fee growth.
Broadcasting revenues grew 4% to $1.8 billion, with a 22% decline in operating income to $253 million. As with ESPN, there was a decrease in advertising revenues at ABC due to lower ratings, as well as higher NBA programming costs.
Disney’s parks and resorts units were star performers in the period, gaining 12% in revenue to $4.9 billion, with operating income up 18% to $1.2 billion. An increase in business at its international operations -- Shanghai Disney Resort and Disneyland Paris -- were a major contributing factor.
Disney’s Studio Entertainment revenues sank 16% to $2.4 billion and with operating income sinking 17% to $639 million, due to lower theatrical and home-entertainment revenue.
Walt Disney was down near 4% in aftermarket trading, when it released its earnings.
Its stock closed on Tuesday up 0.6% to $106.98.