TV network groups such as Walt Disney could lose 3% to 8% in advertising revenue from the second quarter this year through early next year, according to one analyst, due to Coronavirus concerns.
In writing about Disney, Todd Juenger, media analyst at Bernstein Research, wrote:
“The bad news is we expect COVID-19 to cause a dislocation to advertising demand. This will be driven by a number of factors including: supply chain/inability to satisfy demand (think: tech, apparel), and demand suppression for many important product categories (think: travel).”
The worst-case scenario would mean Disney could see lower advertising growth by 3% in the second quarter of this year, and 8% in the third quarter through the second quarter of 2021. The best-case scenario is a 2% reduction to a 5% slide through the end of year.
Some positives here, which other media analysts are talking about, are greater TV consumption as consumers stay home -- either from work or to avoid big crowds while shopping. Another side benefit is: "To the extent people keep their jobs, they are also probably less likely on the margin to cut the cord.”
Juenger does not expect political advertising to be affected for this big Presidential election year. “TV, generally, will benefit from political advertising, which we don't expect will be affected by COVID-19," he said.
Unlike other TV network groups, he says, Disney doesn’t benefit much from political advertising, noting that Disney has the smallest number of owned-and-operated stations among any of the major U.S. broadcast networks.
That said, as this is an Olympics year, Disney will be affected in terms of TV advertising sales if the Games continue to go ahead.
So far, the International Olympic Committee is still planning for the games to run in late July/early August. NBCUniversal has the rights to air the games in the U.S.
"Disney, specifically, is theoretically more exposed to the impact of competitive sports on other networks, given ESPN,” Juenger said.