Disney Scores Earnings Beat and 2 Big ESPN Deals

Disney said Tuesday that it would swap a 10% stake in ESPN for control of key NFL media assets including RedZone and the NFL Network. (Nick Cammett/Getty Images)

Disney stock was sliding Wednesday after the entertainment company beat earnings expectations, raised its guidance, and unveiled two deals that will beef up its ESPN sports streaming service.

Disney stock dropped 4.4% to $113.11 in early trading. The S&P 500 was up 0.2%.

Still, there was plenty to like in the report despite the selloff. Disney reported an adjusted quarterly profit of $1.61 a share topped the $1.45 figure that analysts were expecting, and raised profit forecasts for direct-to-consumer streaming and parks and experiences, the two divisions likely to drive future growth. The company raised its full fiscal year earnings forecast to $5.85 a share. Analysts had been predicting $5.80 a share ahead of the earnings release.

Unfortunately, quarterly revenue rose 2% from a year ago to $23.65 billion, just shy of the $23.69 billion that analysts polled by FactSet were expecting. Operating income for the company’s entertainment segment slid 15% to $1.02 billion, which was roughly in line with Wall Street’s forecasts, while the Disney film studio posted a loss.

Created with Highcharts 9.0.1Source: FactSetAs of Aug. 6

Created with Highcharts 9.0.1DisneyNetflixMay 2025Aug.0102030405060%

Investors may have seen those blemishes as cause to lock in profit after a stellar run. Shares are finally showing signs of life after a decade of stagnation: They have gained 45% since April 8, when markets started rebounding from the shock triggered by President Donald Trump’s April 2 tariff announcement. Video streamer Netflix has climbed 32% over the same period, and the S&P 500 has added 26%.

It wasn’t all about earnings. Disney said late Tuesday that it had struck a deal with the National Football League that gives it control of key media assets including the NFL Network, in exchange for a 10% stake in ESPN.

Under the terms of the deal, the NFL Network will be owned and operated by ESPN and fully integrated into the ESPN streaming platform, due to launch Aug. 21. ESPN will also own the rights to RedZone, which broadcasts live action from all of the Sunday afternoon games.

Separately, ESPN and TKO Group’s World Wrestling Entertainment said they had reached a more than $1.6 billion agreement that will give the sports media company exclusive rights to major WWE events, including WrestleMania and SummerSlam, starting in 2026. TKO shares slid 2.3% in morning trading.

Write to George Glover at george.glover@dowjones.com