• by Wayne Friedman , April 11, 2023

Walt Disney may be facing a more difficult linear TV advertising market in the coming months, one analyst says -- similar to what other media companies will witness.

Michael Morris, media analyst of Guggenheim Securities, projects a 7% decline in the second quarter in linear TV ad business, following a 5% reported drop in the first quarter. This 7% decline will also continue for the rest of the year.

This is “reflecting our view for a more protracted path to recovery in the macro environment than previously anticipated.”

He adds: “While Disney management has not provided any updated commentary on what they are seeing in the ad market, we believe that the company is subject to similar headwinds as noted by other media companies.”

These estimates are more severe than the consensus projections of other analysts -- a 5% drop followed by declines of 6%, 7%, and 4% for the rest of the year.

One key area is Disney’s sports programming, which Morris says is holding up better than overall viewership, despite challenges. For the current season, NBA viewership is “flat to up 1%” for ABC and ESPN.

A year ago, the NBA playoffs viewing was strong, including that of a 22% increase in viewership of the six game NBA Finals series where the Golden State Warriors defeated the Boston Celtics.

“We continue to expect relative resilience in sports and remain more concerned on entertainment content, with our cable advertising outlook modestly ahead of our broadcast estimates.”

Morris estimates that Disney linear TV advertising will be down 9% in the second quarter to $1.9 billion -- with cable TV sinking 9% and broadcast 12% lower.