For a few hours each night this week, Twitter felt a little like the Before Times. People were shouting in all caps about baseball’s return, three-point shots in NBA scrimmages were trending, and there was even some chatter about the MLS’ ongoing season.
Sports are back…kind of. And while I’m excited about having my Toronto Raptors out on the court again, there are probably few as excited about the return of live sports as the leagues — and the Walt Disney Corporation.
An anticipated moment
The NBA, MLB, and MLS’ return signify big business for Disney. For the first time in months, ESPN has something that’s not old sports movies and documentaries for cable customers to tune into. Then there’s the physical space at Disney World the company has rented out to both the NBA and MLS in order for the leagues to continue their seasons. Not only is having basketball and baseball back something that Disney can point sports-starved fans to ESPN and ABC to watch, which could translate into a big uptick in advertisements on the networks, but the NBA is going to pay Disney a helluva lot of money to use Disney’s facilities to play said games.
Having the leagues return for shortened seasons isn’t going to save Disney’s plummeting finances, but it does represent a small and pivotal turning point for the company in these coronavirus times. It is the moment that ESPN executives have anticipated over the last four months.
ESPN’s two biggest forms of revenue are subscription fees and advertising, but it’s not like either of those areas are bulletproof. Let’s look at subscription fees. Cable customers who want access to ESPN purchase packages through their television providers (like Comcast). Cable providers then pay Disney to carry ESPN — these are called affiliate fees. ESPN is routinely one of the most expensive networks for cable providers to carry, and for one reason: ESPN is the most popular network among men and reportedly reaches more than 200 million viewers a month. ESPN also belongs to Disney’s media networks division, which in 2019 saw roughly $25 billion in revenue, surpassing Studios and DTCI. ESPN was critical to that revenue.
Needless to say, ESPN is important to Disney.
But that’s not to imply that ESPN is all gumdrops and rainbows. Cord cutting has impacted ESPN’s revenue over the years. In 2011, ESPN peaked with over 100 million subscribers. Since then, subscribers have declined consistently and annually, dropping to 83 million subscribers by 2019. Executive chairman Bob Iger isn’t immune to industry trends, and noted in an interview with The Ringer earlier this year that ESPN will likely become “far more of a direct-to-consumer product,” even more so than Disney’s standalone ESPN+ app. Disney is also striking distribution deals with more virtual TV providers, including a new multi-year package with FuboTV that includes ESPN.
It’s not just ESPN feeling consumers’ cable fatigue (TNT is also facing difficulties), but the company’s quarterly numbers have concerned analysts. Disney noted in its first quarters earnings this year that subscriptions were down once again — and that was before sports completely went off the air.
Over the last several months, people have cut cable faster than ever. If the only thing getting people to keep their cable service was live sports, which analyst group MoffettNathanson has routinely suggested is the main factor, not having sports at all is the final straw. Hell, even New York attorney general Letitia James argued that cable providers should refund customers over the lack of sports being broadcast because they weren’t getting what they paid for — an argument that has its own logical problems, and that would inevitably affect companies like Disney and AT&T.
The upside? Ads
Sports are back now, and while that may push some to reactivate canceled cable subscriptions, the main form of revenue that Disney is going to see is advertising. It’s another area that Disney has struggled with. The company noted in its first quarter report that advertising on ESPN fell 4.5 percent, marking the “fastest rate in company history,” according to Sports Insider. Even worse for Disney, the lower ad revenue came from a decrease in viewership that the company partially attributed to a decline in people watching NBA games. The NBA also noted that viewership through mid-December on ESPN and TNT were down 15 percent compared to the year before.
Luckily for Disney, ESPN isn’t the NBA. The MLB also returned this week, and the season opener between the New York Yankees and the Washington Nationals produced the “network’s largest ever audience for an opening night game,” according to Variety. The trade cited Nielsen numbers, which suggested that approximately four million people tuned into watch the game. Advertisers are already banking on people’s excitement over having live sports back, too. A Disney spokesperson told CNN that “we are sold out of inventory for the opening week and the rest of the regular season,” with a “high demand” for the MLB games.
Although the NBA doesn’t seem to have generated the same level of excitement, in a post-Last Dance world that’s looking for any kind of top-tier live sports to watch, the NBA will benefit. I have to imagine that just about every league will benefit from people still mostly stuck at home and looking for any type of live game. ESPN gets to hold much of that newfound attention. Even if those ad numbers don’t hit pre-COVID levels right away, it’s enough for Disney to start earning some revenue it was sorely missing and address investors anxieties. Seeing an increase in ad revenue — on top of the reported $150 million the NBA is paying for Disney to host the league this summer — should give executives a little more confidence heading into the rest of the year.
It’s difficult to say that Disney needs sports more than sports needs Disney, but the two feel more interchangeable than ever. Two major leagues have relocated their top talent and personnel to the Happiest Place on Earth in an attempt to salvage some of what was lost. Disney, whose DisneyWorld parks only just started a phased reopening and is operating under tight safety restraints, is finding ways to turn its mammoth space into something profitable. If the networks those games play on just so happen to be owned by Disney, and Disney can recoup some of its devastating advertiser losses, well that’s just grand for the media empire.
Sports aren’t going to save Disney. The Parks aren’t operating at the capacity they need to — if they’re operating at all. The Studios business will remain in shambles over the next foreseeable future. Broadway is closed, cruises have docked, and production on just about everything has stalled. Disney wants everything to suddenly be ok at once, but what it needs is small wins to help the company navigate the next bit of uncertain terrain. Having sports back feels good for us, but it’s one gigantic sigh of relief for executives at the House of Mouse.
Mulan delayed indefinitely, Avatar and Star Wars films pushed back one year
Well who could have seen this coming?? After Warner Bros. delayed Tenet indefinitely (go to town on those “tenetively” puns, folks), Disney followed suit by taking Mulan off its theatrical slate. As part of the ongoing changes, Disney also delayed every Avatar sequel and upcoming Star Wars movie by one year. Avatar 2 will now open in December 2022, and the next Star Wars movie will open in 2023.
The New Mutants is still a theatrical release for some reason
Even though Mulan is delayed indefinitely, Disney is pushing ahead with New Mutants. The movie got a new trailer and special look at ComicCon@Home, which reaffirmed the film’s release date. It’s kind of poetic; The New Mutants, a movie I never thought would actually ever get released,will debut during a pandemic — when practically no one will see it.
Here’s a look at Raya and the Last Dragon
Those Lando Disney+ rumors…
Obviously, this is very exciting — but take every Star Wars Disney+ rumor with a grain of salt. Still, we know that Disney and Lucasfilm want to produce more Disney+ originals, and a six- or eight-episode return to Young Lando is the perfect opportunity. Plus, Alden Ehrenreich, who played young Han Solo in the same film, hinted that some aspect of Solo could pop up again.
Color me intrigued as fuck, Disney.
Spooked is the newest Disney+ show
One of my biggest complaints about Disney+ is the lack of Originals that aren’t tied into the company’s two biggest franchises, Star Wars and Marvel. Spooked might be exactly what I was asking for.
Described as a supernatural comedy by The Hollywood Reporter, Spooked will reportedly “involves a Halloween night gone awry as trick or treaters are transformed into whatever costume they are wearing.”
Disney reportedly stops advertising for Disney+, Hulu on Facebook
Disney is one of Facebook’s biggest advertisers, but the company has supposedly paused its advertising in wake of the #StopHateforProfit campaign. Disney joins other major corporations including Honda, Verizon, and Ben & Jerry’s in pausing spending. Kim Lyons at The Verge with more:
“According to the WSJ, Disney has paused ads for its news Disney Plus streaming service on Facebook, and paused ads for its Hulu streaming service on Facebook’s Instagram platform. Disney spent about $210 million for Disney Plus ads on Facebook in the US in the first half of 2020, the WSJ reports, and spent $16 million for Hulu ads on Instagram between April 15th and June 30th.”
A Hilary Duff/Lizzie McGuire update!
Remember when Hilary Duff and Disney were all in on a Lizzie McGuire Disney+ show, and then that seemed to suddenly stop? They’re back!
“Disney has certain things that have to be met for their brand, and I totally understand that, and they totally understand my needs. So we’re in a really good place of being like, ‘Hey, we pressed pause, and we’re regrouping.’ There’s been a lot of like creative meetings, obviously virtually. I think we’re on the right path, and I want it to happen more than anyone and they obviously feel the same way.”
Hulu gets a Hillary Clinton AU
Hulu secured the rights to Curtis Sittenfeld’s Rodham, an alternative history written in a world where Hillary Clinton never married Bill Clinton.
With this and the streamer’s Hillary Clinton documentary, Hulu now have a Hillary Clinton Cinematic Universe. Wild.
Disney institutes stricter drink and food safety policies
DisneyWorld’s ongoing phased reopening means that policies are changing all the time. Now, DisneyWorld is asking guests to not walk around with food and drink. There are designated areas to hang out, eat, and then move on from. Seems like a pretty decent policy update!!!
Over at Disneyland in Anaheim, California, stricter mask policies are coming to Downtown Disney, which is open. Bandanas are no longer acceptable; Disney is requiring full protective masks be worn. Also seems like a pretty decent policy update!!
A quick reminder: Florida has 415,000 confirmed COVID-19 cases; California has 453,000. Both are growing. Anyway.
Inside the Bubble: digital fans
Back to the Bubble, my favorite ongoing story! The NBA is back in session at DisneyWorld, and to try and make it a little more lively, the NBA teamed up with Microsoft to bring in virtual fans.
“Once teams select those fans, they will need a webcam and a microphone. They will log onto Microsoft Teams through their computer or phone. And then they will use Microsoft Teams’ new feature, “Together Mode.” That will enable the fans to interact with each other digitally throughout the game while they watch the broadcast feed. With this feature, fans can high five each other, hold out signs or react to anything that happens on the court. The NBA’s video-boards will show those real-time reactions.”
Here’s the thing: as an NBA fan, I’d rather not have any of this? It’s distracting and loud and I hate it. Maybe I’m just Old Man Shakes Fist at Cloud about the situation, but I just want to watch the boys play ball. The sound of sneakers scuffing on wood? Music to my ears.
Rough news for Rise of the Resistance
Rise of the Resistance is arguably DisneyWorld’s most popular attraction. Situated in Galaxy’s Edge in Hollywood Studios, the ride is based on the Star Wars sequels and based on every video I’ve ever watched, it looks like a ton of fun — if you can get on.
Securing a pass for Rise of the Resistance is difficult on a normal day, but now Disney is removing one of the pass options. Instead of being available at 10am, 1pm, and 4pm, Rise of the Resistance is now only available at 10am and 2pm. Throw in some reported glitches with the app where park visitors go to secure passes, and it’s a luck of the draw situation.
Another reminder! Rise of the Resistance passes sell out in five minutes. Even with the staggered opening, it looks like that’s still the case.
Watch Disney Television Networks’ ComicCon@Home panels
Just because coronavirus shut down San Diego Comic-Con doesn’t mean Comic-Con is over. The virtual version of the festival happened this past week, with panels for Disney+ TV series, FX shows, and other Disney specials. They’re all on YouTube!
Disney striking “aggressive deals” for new shows
The Wall Street Journal reports that as television production remains suspended, “Disney’s television studios are aggressively making deals for new shows for its own outlets, ABC and Disney+, as well as for rivals Netflix and HBO Max.”
That makes sense! Disney has the ability to license other shows for its own networks and streamers, but can continue to sell titles (including Central Park, which is on Apple TV+) to other networks and streamers.
Trailers of the Week
*Because of ComicCon@Home, there are a few clips from upcoming titles thrown in with the trailers. Enjoy!