On Thursday, Disney released its financial results for FY17 (which ran from 10/1/16-9/30/17). https://ditm-twdc-us.storage.googleapis....rnings.pdf

Disney's Cable Networks division, of which ESPN is a part, reported revenues of $16.527 billion as compared to $16.632 billion in FY16, a decrease 1%. The division reported operating income of $5.353 billion as compared to $5.965 in FY16, a decrease of approximately 10%. Disney offered the following brief analysis of the division results, which appear to relate only to the fourth quarter:

Quote:Cable Networks
Operating income at Cable Networks decreased $15 million to $1.2 billion for the quarter due to a decrease at Freeform, partially offset by growth at the Disney Channels due to higher program sales.

The decrease at Freeform was driven by lower advertising revenue primarily due to a decrease in average viewership.

Results at ESPN were comparable to the prior-year quarter as higher programming costs and lower advertising revenue were offset by higher affiliate revenue. The programming cost increase was driven by contractual rate increases for NFL, college sports and MLB, partially offset by the absence of costs for Olympics programming internationally and the World Cup of Hockey. Lower advertising revenue was due to a decrease in average viewership and lower units delivered, partially offset by higher rates. Affiliate revenue growth resulted from contractual rate increases, partially offset by a decline in subscribers.

My quick take, ESPN's revenues remain stable despite a loss of subscribers because of increasing subscriber fees. However, profits are down due to increases in rights fees. Despite all of this, ESPN remains extremely profitable, with a gross margin of over 32% for FY17. It's biggest immediate challenge is getting its costs under control.