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Disney’s ESPN stock troubles; sports network could be on the chopping block

By Ryan Dawn Umadhay | May 10, 2017 07:23 PM EDT
Jim Cramer explains ESPN's effect on Disney
(Photo : Screenshot: Youtube/CNBC) Jim Cramer explains ESPN's effect on Disney

ESPN's run on bad spotlight continues even after the backlash on its recent decision on cutting employees. The latest earnings report with its parent company paints a bleak picture for the sports network which could mean a darker future.

ESPN Drags Disney Down

Disney recently held an earnings report and its wide range of investments are actually gaining some positive outlook. But ESPN is going to the opposite direction since it's practically dragging down the powerful company who also hold profitable properties such as Pixar, Marvel and Star Wars.

According to Yahoo Finance, the "Worldwide Leader in Sports" reported an increase in revenue but a drop in profit and all this points to ESPN. The increase in revenue was due to the decrease in operating expenses but the sports network is still struggling due to expensive programming. Unfortunately, this is third time Disney reported on this type of changes.

ESPN's decision to fire most of its prominent sports commentators and personalities is basically a business decision. The sports network is still tied-in with multiple and expensive contracts on broadcasting rights.

No More ESPN for Disney?

One of the biggest questions for Disney is on what they will do to ensure the future of the sports network. But according to Mashable, it would be best for Disney to focus on its profitable properties and let ESPN find a new home. Although the sports network no longer holds the monopoly on sports casting, it is still an impressive media company and there will be serious investors that could take over in a heartbeat.

For now, Disney should look to stop the bleeding for its sports network. The backlash on firing some of its popular personalities certainly didn't help but it could find ways to ensure its current subscribers continue to patronize their content.

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