_The Walt Disney Company has reported mixed results for its entertainment business in the third quarter of fiscal 2025, with traditional TV revenues sliding and content licensing falling short of expectations. However, the streaming division showed signs of strong momentum, and a blockbuster NFL deal promises to reshape ESPN’s future._
Disney’s entertainment division, which includes its TV networks, streaming services, and film studio, posted $10.7 billion in revenue, up just 1 per cent from the same quarter last year. Operating income fell 15 per cent to $1.02 billion, driven by a 28 per cent drop in operating income across linear networks and a decrease in content sales and licensing income due to “the performance of titles in the quarter compared to the strong performance of Inside Out 2 in the prior-year quarter.”
Despite these headwinds, Disney’s Direct-to-Consumer segment was a standout performer. DTC revenue increased 6 per cent, while the segment turned a profit of $346 million, up from a significant $19 million loss a year ago.
The gains were fueled by subscriber growth and pricing adjustments. Disney+ subscriptions grew by 1.8 million to reach 128 million globally, and the average monthly revenue per Disney+ subscriber also increased slightly to $7.86, supported by higher advertising revenue.
ESPN’s Big Bet on Football
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In the most significant strategic development of the quarter, ESPN, Disney’s flagship sports brand, [announced yesterday that it will acquire NFL Network, NFL RedZone, and NFL Fantasy in exchange for a 10 per cent equity stake granted to the NFL.](https://www.bandt.com.au/super-bowl-touches-down-on-disney-as-espn-acquires-nfl-network-key-media-assets/)
“This is an exciting day for sports fans,” said Jimmy Pitaro, chairman of ESPN. “By combining these NFL media assets with ESPN’s reach and innovation, we’re creating a premier destination for football fans. Together, ESPN and the NFL are redefining how fans engage with the game—anytime, anywhere. This deal helps fuel ESPN’s digital future, laying the foundation for an even more robust offering as we prepare to launch our new direct-to-consumer service.”
The deal is expected to bring the 2026 Super Bowl to Disney+ for the first time and includes:
* Simulcasts and live games: At least six NFL games a week, with potential for more.
* NFL RedZone and Fantasy: These fan-favourite experiences will be embedded within ESPN’s DTC platform.
* Draft coverage expansion: Disney+, Hulu, and ESPN’s DTC service will stream ESPN and ABC’s presentations of the NFL Draft starting in 2026.
“Since its launch in 2003, NFL Network has provided millions of fans unprecedented access to the sport they love,” said NFL Commissioner Roger Goodell. “Whether it was debuting Thursday Night Football, televising the Combine, or telling incredible football stories through original shows and breaking news, NFL Network has delivered. The Network’s sale to ESPN will build on this remarkable legacy, providing more NFL football for more fans in new and innovative ways.”
Beyond content rights, the new ESPN app, launching August 21, will offer enhanced features like multiview, fantasy football integration, live stats, betting tools, and customisable viewing experiences.
“This deal helps fuel ESPN’s digital future,” said Pitaro, noting that it positions ESPN to compete in a world increasingly dominated by streaming consumption. The NFL will retain control over its other digital assets, including NFL Films, NFL.com, and team websites.
For Disney CEO Bob Iger, the deal is another milestone in reshaping the company’s media portfolio around DTC. “The company is taking major steps forward in streaming with the upcoming launch of ESPN’s direct-to-consumer service, our just-announced plans with the NFL, and our forthcoming integration of Hulu into Disney+, creating a truly differentiated streaming proposition that harnesses the highest-caliber brands and franchises, general entertainment, family programming, news, and industry-leading sports content,” he said.
“We have more expansions underway around the world in our parks and experiences than at any other time in our history. With ambitious plans ahead for all our businesses, we’re not done building, and we are excited for Disney’s future.”
“Today’s announcement paves the way for the world’s leading sports media brand and America’s most popular sport to deliver an even more compelling experience for NFL fans, in a way that only ESPN and Disney can,” said Iger. “Commissioner Goodell and the NFL have built outstanding media assets, and these transactions will add to consumer choice, provide viewers with even greater convenience and quality, and expand the breadth and value proposition of Disney’s streaming ecosystem.”
Disney forecasts more than 10 million additional subscribers for Disney+ and Hulu combined in the fourth quarter, with most of that growth coming from Hulu through an expanded distribution deal with Charter. The company expects its DTC entertainment business to generate $1.3 billion in operating income for FY25.
While linear TV continues to slide, Disney’s latest results show it’s betting big on a streaming future where content, convenience, and sports fandom intersect.