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Disney Bets on Sports Streaming: Will ESPN's New DTC Launch Win Big?
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Key Takeaways
Disney's DTC revenues hit $6.6B in Q3 FY25, up 14% Y/Y, on margin and subscriber growth.
ESPN's new tiers, Unlimited and Select, bundle with Disney+ and Hulu to boost ARPU and cut churn.
Exclusive NFL, RedZone and WWE rights, plus enhanced app features, strengthen ESPN's streaming edge.
Disney (DIS - Free Report) is making a bold play in the streaming revolution with the highly anticipated launch of ESPN’s direct-to-consumer (DTC) service. The move follows Disney’s landmark sports rights deal, securing premium content like NFL Network, RedZone and future WWE events — cementing its dominance in live sports coverage. As streaming viewership outpaces traditional cable for the first time in 2025, the company sees sports as its next major growth engine, delivering live action directly to fans without cable bundles.
The optimism stems from strong fundamentals. In the third quarter of fiscal 2025, Disney’s DTC segment posted $6.6 billion in revenues, up 14% year over year, supported by improved margins and subscriber growth across Disney+ and Hulu. ESPN’s new service builds on this momentum with two tiers — Unlimited ($29.99/month), offering all ESPN networks and 47,000 live events annually, and Select, which continues the ESPN+ experience. This high-value subscription model and attractive bundles with Disney+ and Hulu are designed to boost Average Revenue Per User (ARPU) and reduce churn, strengthening Disney’s streaming ecosystem.
Exclusive sports rights, including NFL Network and RedZone — secured through a landmark deal — and WWE’s premium events from 2026, provide a competitive edge. Coupled with an enhanced ESPN app featuring personalized feeds, multiview options and integrated betting and commerce tools, Disney delivers a premium, interactive experience that resonates with today’s digital-first sports fans.
This move solidifies its leadership in live sports streaming. With recent upgrades citing ESPN’s DTC launch as a catalyst for sustained revenue and margin expansion. By combining world-class content, innovative tech and a robust bundling strategy, Disney is positioning itself to dominate the sports streaming race.
How Rivals Stack Up Against DIS in the Sports Streaming Race
Fox (FOXA - Free Report) has entered the streaming wars with Fox One, a direct-to-consumer platform uniting live sports, news and entertainment in one service. Leveraging strong rights across the NFL, MLB and FIFA, FOXA emphasizes affordability and AI-driven personalization while avoiding heavy content production costs. Despite its breadth, FOXA struggles to match Disney’s deeper sports integrations and cross-platform synergies, positioning Fox One as a cost-efficient bundle rather than a true rival to ESPN’s dominance.
FuboTV (FUBO - Free Report) has carved out a unique niche as the sports-first live TV streamer, delivering NFL, NBA, MLB, NHL, NCAA, MLS and European soccer with features like multi-view and cloud DVR. Backed by Disney’s investment, FuboTV expands its reach while sharpening its competitive edge. Globally recognized among the fastest-growing companies, FuboTV continues to scale with over 2 million subscribers. By focusing deeply on live sports, it outperforms generalist rivals and remains the premier destination for dedicated fans.
DIS shares have gained 6.8% in the year-to-date period, underperforming both the Zacks Consumer Discretionary sector’s rise of 11.6% and the Zacks Media Conglomerates industry’s growth of 12.7%.
DIS’ YTD Price Performance
Image Source: Zacks Investment Research
From a valuation standpoint, DIS stock is currently trading at a forward 12-month Price/Earnings ratio of 18.54X compared with the industry’s 20.6X. DIS has a Value Score of B.
DIS’ Valuation
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for Disney’s 2025 earnings is pegged at $5.85 per share, up by 1.2% over the past 30 days. This indicates a 17.71% increase from the figure reported in the year-ago quarter.
Image: Shutterstock
Disney Bets on Sports Streaming: Will ESPN's New DTC Launch Win Big?
Key Takeaways
Disney (DIS - Free Report) is making a bold play in the streaming revolution with the highly anticipated launch of ESPN’s direct-to-consumer (DTC) service. The move follows Disney’s landmark sports rights deal, securing premium content like NFL Network, RedZone and future WWE events — cementing its dominance in live sports coverage. As streaming viewership outpaces traditional cable for the first time in 2025, the company sees sports as its next major growth engine, delivering live action directly to fans without cable bundles.
The optimism stems from strong fundamentals. In the third quarter of fiscal 2025, Disney’s DTC segment posted $6.6 billion in revenues, up 14% year over year, supported by improved margins and subscriber growth across Disney+ and Hulu. ESPN’s new service builds on this momentum with two tiers — Unlimited ($29.99/month), offering all ESPN networks and 47,000 live events annually, and Select, which continues the ESPN+ experience. This high-value subscription model and attractive bundles with Disney+ and Hulu are designed to boost Average Revenue Per User (ARPU) and reduce churn, strengthening Disney’s streaming ecosystem.
Exclusive sports rights, including NFL Network and RedZone — secured through a landmark deal — and WWE’s premium events from 2026, provide a competitive edge. Coupled with an enhanced ESPN app featuring personalized feeds, multiview options and integrated betting and commerce tools, Disney delivers a premium, interactive experience that resonates with today’s digital-first sports fans.
This move solidifies its leadership in live sports streaming. With recent upgrades citing ESPN’s DTC launch as a catalyst for sustained revenue and margin expansion. By combining world-class content, innovative tech and a robust bundling strategy, Disney is positioning itself to dominate the sports streaming race.
How Rivals Stack Up Against DIS in the Sports Streaming Race
Fox (FOXA - Free Report) has entered the streaming wars with Fox One, a direct-to-consumer platform uniting live sports, news and entertainment in one service. Leveraging strong rights across the NFL, MLB and FIFA, FOXA emphasizes affordability and AI-driven personalization while avoiding heavy content production costs. Despite its breadth, FOXA struggles to match Disney’s deeper sports integrations and cross-platform synergies, positioning Fox One as a cost-efficient bundle rather than a true rival to ESPN’s dominance.
FuboTV (FUBO - Free Report) has carved out a unique niche as the sports-first live TV streamer, delivering NFL, NBA, MLB, NHL, NCAA, MLS and European soccer with features like multi-view and cloud DVR. Backed by Disney’s investment, FuboTV expands its reach while sharpening its competitive edge. Globally recognized among the fastest-growing companies, FuboTV continues to scale with over 2 million subscribers. By focusing deeply on live sports, it outperforms generalist rivals and remains the premier destination for dedicated fans.
DIS’ Share Price Performance, Valuation & Estimates
DIS shares have gained 6.8% in the year-to-date period, underperforming both the Zacks Consumer Discretionary sector’s rise of 11.6% and the Zacks Media Conglomerates industry’s growth of 12.7%.
DIS’ YTD Price Performance
Image Source: Zacks Investment Research
From a valuation standpoint, DIS stock is currently trading at a forward 12-month Price/Earnings ratio of 18.54X compared with the industry’s 20.6X. DIS has a Value Score of B.
DIS’ Valuation
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for Disney’s 2025 earnings is pegged at $5.85 per share, up by 1.2% over the past 30 days. This indicates a 17.71% increase from the figure reported in the year-ago quarter.
Image Source: Zacks Investment Research
DIS stock currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.