Disney's Financial Woes: The Impact of the YouTube TV Blackout
Disney is facing financial challenges due to the blackout of its networks on YouTube TV. The estimated loss for Disney is around $30 million per week, with analysts predicting a revenue headwind of $60 million due to the ongoing blackout. The dispute between Disney and YouTube TV has been ongoing for 12 days, impacting Disney's adjusted earnings per share by 2 cents each week.
The blackout has resulted in YouTube TV customers missing out on popular shows like "Monday Night Football," college football games, ABC primetime shows, and news programs. The standoff has also affected YouTube TV, with a survey showing that 24% of subscribers have either canceled or intend to cancel their service due to the Disney blackout. In response, YouTube TV has offered subscribers a one-time $20 credit to mitigate cancellations.
The blackout on YouTube TV began on October 30, following disagreements between Disney and Google over pricing. The companies have been unable to reach a deal, with Google accusing Disney of requesting an unprecedented fee hike, while Disney claims that Google is not paying fair rates for their channels. The launch of ESPN Unlimited, a standalone streaming package, has been successful, with analysts estimating that it will attract around 3 million subscribers by September 2026.
Despite the financial impact of the blackout, Disney is also in talks with the NFL to give them a 10% stake in ESPN, valued at up to $2.5 billion. This deal is still pending, adding to the uncertainty surrounding Disney's financial outlook. The ongoing dispute between Disney and YouTube TV is expected to be resolved soon, but the financial implications for both companies remain significant.