Walt Disney is preparing for a potential prolonged negotiation with YouTube TV over distribution of its television networks. The dispute has raised concerns about the outlook for its traditional TV business, which is already under pressure.
The company missed quarterly revenue expectations, reporting $22.5 billion compared to the $22.75 billion forecast. While earnings from streaming and parks showed strong growth, weaknesses in cable and broadcast television weighed on results. Shares fell 8.3% in afternoon trading on Thursday.
Disney’s networks were removed from YouTube TV, the fourth-largest pay-TV provider in the U.S., on October 30. Chief Financial Officer Hugh Johnston said the company has “built a hedge” into its forecasts, expecting the negotiations could last for some time. Disney CEO Bob Iger emphasized that the proposed deal is equal to or better than agreements with other major distributors.
The traditional television unit saw profit decline 21% to $391 million, and ESPN income also slipped. Streaming services, however, posted strong results, with earnings rising 39% to $352 million. Disney added 12.5 million new subscribers across Disney+ and Hulu, reaching a total of 196 million. Growth in theme parks also helped offset declines in TV, with operating income rising 13% to $1.88 billion, boosted by expansions in Disneyland Paris and the U.S. cruise business.
Analysts estimate a 14-day blackout on YouTube TV could cost Disney roughly $60 million. Experts note that reducing reliance on cable providers will take time, but Disney continues to invest in streaming and parks to diversify revenue.
In addition, Disney plans to increase its dividend by 50% to $1.50 per share and double its share buyback program to $7 billion for fiscal 2026. Iger also discussed exploring artificial intelligence tools to enhance Disney+ experiences and allow users to create short-form content while protecting the company’s intellectual property.
Despite challenges in traditional media, Disney remains focused on long-term growth through streaming, parks, and innovative technology. The company’s leadership emphasizes balancing fair distribution deals with new opportunities to engage audiences worldwide.
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