Disney beat on both the top and bottom lines.
Management said it will continue to invest big in its sports channel ESPN and the network’s new streaming service, ESPN+.
With more tech giants such as Facebook and Amazon bidding for top-tier sports stream rights, Disney’s problem will occur in a few years, analyst says.
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Disney is spending big money on sports programming, and analysts say it could be a problem soon as tech giants such as Facebook and Amazon enter the sports-streaming world.
In Disney’s quarterly results out Thursday, the company said its total operating income increased 17%, but that of its cable networks dropped 6%, due to the consolidation of BAMTech, a service ESPN purchased from Major League Baseball.
Those cost increases in sports programming could be troublesome, according to Pivotal Research Group.
“The problem will occur within a few years when Facebook, Amazon and presumably Google bid for top tier sports rights in a meaningful way,” Brian Wieser, an analyst at Pivotal Research Group, said in a note sent out to clients on Friday.
Facebook has been aggressively investing in live sports, and has reached many high-profile streaming deals for events such as Major League Baseball games,
Source:: Businessinsider – Tech