The Walt Disney Co. reported ad revenues up in its fiscal third quarter (ended July 2) for the domestic cable channels, but down for broadcast, primarily due to the timing of The Academy Awards and decreased viewership on ABC. However, during the company’s quarterly conference call Wednesday, CFO Christine McCarthy assured analysts that advertising demand is still strong.
“I know there’s been a lot written recently about ad trends. But I just want to start off by saying pacing in our scatter market continues to be solid across streaming, sports, as well as our broadcast network,” the CFO said.
Disney reported Domestic Channels (broadcast and cable combined) revenues up 2% to $5.7 billion. Operating income rose 15% to $2.1 billion.
“The increase at Broadcasting was due to higher results at ABC and, to a lesser extent, at the owned television stations. The increase at ABC reflected lower programming and production costs, growth in affiliate revenue, which reflected higher contractual rates, and a decrease in marketing costs, partially offset by lower advertising revenue,” Disney said in its press release.
Cable’s ad growth was credited to higher viewership. That was helped by the timing of the NBA Finals, which are programmed by ESPN, but air on ABC.
CEO Bob Chapek was asked about sports rights negotiations, specifically the NBA renewal talks. He didn’t tip his hand, but noted that the company is disciplined in sports rights negotiations and will only do deals that make sense for Disney shareholders.
Much of the call focused on the resurging Parks businesses and streaming platforms.
Chapek announced that the date for launching the previously announced advertising-supported tier on Disney+ will be Dec. 8.
“Given the results of our recently completed upfront, it is clear that our unmatched portfolio continues to be highly sought-after by advertisers. Combined with our deep expertise in ad tech, we are in a position of strength with record upfront advertiser commitments ready to go for the launch of our ad-supported tier,” the CEO said.
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