Disney Falls on Analyst Rating Cut as ESPN Woes Overshadow ‘Star Wars’
Walt Disney Co. dropped as much as 3.6% after BTIG downgraded the stock to sell, saying the owner of ESPN overpaid for sports rights at the expense of its cable-TV unit’s profitability.
In a note titled “Even The Force Cannot Protect ESPN,” published on the day Disney’s “Star Wars: The Force Awakens” debuts in U.S. theaters, BTIG analyst Richard Greenfield said he now estimates that Disney’s fiscal 2017 cable operating profit will decline from a year earlier.
Concern about subscriber losses at ESPN, which remains the dominant sports outlet in American and is Disney’s most profitable channel, has contributed to two meltdowns in media stocks since August, because they cast light on the magnitude of the number of consumers who are dropping traditional TV packages for cheaper online alternatives.
