The financial consequences of the ongoing content dispute between Google and Disney are mounting rapidly. With the blackout of ESPN, ABC, and other key Disney channels on YouTube TV extending into its second full week, analysts estimate that the entertainment giant is losing approximately $4.3 million in revenue every day.
This massive daily loss stems directly from lost carriage fees and advertising income. According to recent research from Morgan Stanley equity analysts, the 14-day interruption alone may represent a $60 million headwind against Disney’s fourth-quarter fiscal results. For shareholders, this prolonged absence is expected to shave two cents off Disney’s adjusted earnings per share for every additional week the networks remain dark.
The YouTube TV blackout has come at a high cost to Disney: $4.3M daily
The core of the conflict is a familiar disagreement: pricing. The blackout began just before midnight on October 30th, following the expiration of the carriage agreement. Google states that Disney’s demands involve an “unprecedented rate increase,” arguing that acquiescing would force them to raise subscription prices for YouTube TV customers. Meanwhile, Disney insists that Google is “refusing to pay fair rates” for its highly valued content portfolio.
The consequences of the dispute are not only impacting Disney’s balance sheet. YouTube TV is also getting hit by this. Recent surveys suggest about 24% of subscribers have either canceled or plan to cancel their service specifically because the Disney networks are unavailable. YouTube TV has attempted to soften the impact by offering customers a one-time $20 account credit to offset the disruption. However, many considered the movement insufficient.
Viewers have already missed a considerable amount of high-profile content. The list includes consecutive Monday Night Football matchups and daily staples like Good Morning America. According to analysts, the final resolution could finally arrive later this current week. The development will influence not only immediate quarterly results but also long-term distribution strategies in the streaming era. We will have to wait to see if this high immediate cost for Disney during the YouTube TV blackout ends up being profitable in the long term with a new and large deal.
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