People are back at Disney’s theme parks but the company’s earnings haven’t yet returned to pre-pandemic levels.
The Mouse turned a $1.1 billion profit in its fiscal Q2 2021, despite a 13% year-over-year drop to $15.6 billion in revenue. Expected revenue was $15.9 billion. Disney stock dropped 3.5% in after hours trading Thursday.
Disney+, which saw massive growth during the pandemic, hit 103.6 million paid subscribers at the end of fiscal Q2, just short of the 109 million subs anticipated.
Still, the outlook is positive, especially for entertainment giant’s sports offerings.
Disney announced a seven-year extension with Major League Baseball beginning in 2022. ESPN will broadcast 30 regular-season games, plus all wild-card playoff games.
The MLB extension is one of several key sports rights deals Disney has secured in the last six months:
- Dec. 10: 10-year deal with SEC football, basketball begins in 2024
- March 10: Seven-year deal with the NHL begins in 2021
- March 18: 10-year deal with the NFL begins in 2023
- May 13: Eight-year deal with LaLiga soccer begins in 2021
CEO Bob Chapek said the company is in talks about a new NFL Sunday Ticket deal, but will only move forward if it will be profitable.
Chapek also said Disney+ is on track for 230 million to 260 million streaming subscribers by the end of 2024. Hulu subscriptions grew 30% year-over-year to 41.6 million, and ESPN+ subs are up 75% to 13.8 million.
Disney considers both linear and direct-to-consumer rights with each deal. DTC revenue shot up to $4 billion, but production costs from Disney+ drove expenses above segment earnings to a $300 million loss.
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