Web desk: Google’s YouTube and Walt Disney announced on Friday that they have reached a deal to restore Disney-owned channels on YouTube TV.
The agreement comes after a fee dispute temporarily left millions of subscribers without access to major live sports and US Election Day programming.
Disney Faces Potential Fight with YouTube TV
Previously, Walt Disney signalled that it could face a long dispute with YouTube TV over the distribution of its television networks, reports Reuters.
The news raised concerns among investors about the outlook for Disney’s declining TV business.
The company also missed quarterly revenue expectations, as weakness in cable overshadowed strong growth in streaming and its parks business. Disney shares fell 8.3 per cent in afternoon trading.
On a post-earnings call, Chief Financial Officer Hugh Johnston said the company has “built a hedge” into its forecasts in case negotiations with YouTube TV take time.
Disney’s networks disappeared from YouTube TV on October 30. YouTube TV is the fourth-largest pay-TV provider in the United States with about 10 million subscribers. NBCUniversal faced a similar dispute with YouTube TV earlier this year.
Analyst Ross Benes from Emarketer said that Disney is reducing its reliance on cable companies. He added that removing channels from large distributors like YouTube TV will take time, and the absence is significant for sports fans.
Morgan Stanley analysts estimate that a 14-day blackout on YouTube TV could cost Disney around $60 million in revenue. Disney CEO Bob Iger said the company is offering a deal that is equal to or better than agreements with other major distributors.
Disney’s quarterly revenue was $22.5 billion, slightly below the $22.75 billion forecast. Profit at its traditional television unit fell 21 per cent to $391 million, and income from ESPN also declined.
Streaming earnings rose 39 per cent to $352 million. Disney has invested more in streaming and theme parks to offset the decline in cable TV.
The company also announced a 50 per cent increase in its dividend to
$1.50 per share and doubled its share buyback plan to $7 billion for fiscal 2026. Adjusted earnings per share were $1.11, slightly above analyst estimates.
Disney’s theme parks unit saw profit rise 13 per cent to $1.88 billion, helped by its US cruise line and Disneyland Paris. The company added 12.5 million subscribers to Disney+ and Hulu during the quarter, reaching a total of 196 million.
Operating income from Disney’s entertainment division fell by more than a third to $691 million, as this year’s films did not match the success of last year’s hits.
Iger said Disney is exploring ways to use artificial intelligence on its platforms. The company is looking at AI tools to allow Disney+ subscribers to create short videos while protecting its characters and stories.
Iger said AI could make the platforms more engaging and give users new ways to interact with content.
