Global business news twenty four hours a day at Bloomberg dot com, the radio, plus mobile lap and on your radio. This is a Bloomberg Business flag from Bloomberg World Headquarters. I'm Charlie Pellett. Just getting the latest quarterly numbers out of the Walt Disney Company. Third quarter adjustin EPs of a dollar sixty two estimates There were for a dollar sixty one third quarter revenue of beat as well, fourteen point three billion estimates there for fourteen point two billion.
Digging a little deeper into the third quarter report, media networks revenue five point nine one billion estimates, there were four six billion. Parks and resorts revenue there four point three eight billion estimates four point four two billions. Stay with Bloomberg. We've got more on the Disney story coming up right here on Bloomberg Radio. Also just one additional headline to pass along to you. It is buying a minority stake in BAM Tech SMP up a point today one,
a gain there of less than point one percent. Down in US Reels up three, little change there and has Stack Advancing twelve a gain of two tenths of one percent to fifty five Gold up four or fifty out, a gain of three tenths of one percent. I'm Charlie Pellet. That's of Bloomberg Business Flash. This is taking stock with pin Box and Kathleen Hayes on Bloomberg Radio. Disney, the Walt Disney Company, reporting quarterly results that exceeded analysts estimates
by a penny. Right now, taking a look at the shares in the after hours trade, they are higher by about one percent. Here to tell us more about Disney and all things media, is Geita Raganathan, technology and media analyst for Bloomberg Intelligence, joining us from our office in Princeton, New Jersey, and you can follow geta at n gone one. Alright,
Keith tell us about Disney. I was looking at the else today and I think the most interesting thing, at least for those that don't know about bam Tech, is that bam Tech, which Disney announced they're taking a third thirte pent steak Um was previously formed by Major League Baseball was part of the digital rights business of Major
League Baseball. Correct, yes, exactly exactly. I think the most interesting part of this steake by Disney kind of really shows their commitment now towards the whole digital consumption of media, and I think it demonstrates UM that they are willing to take some form of ESPN or at least some content from ESPN and kind of go direct to consumer or kind of have some UM digital offering with that content. UM. So I think that definitely is going to be reassuring
to investors. Well, under the terms of the transaction, Disney says is going to pay a billion dollars in two installments, one now and one in January twenty seventeen, and also has the option to acquire majority ownership in the coming years. Does Disney need this, this kind of network, this major league baseball, this band tech that was separated from the broader digital business. Yeah, I think it is going to be instrumental for Disney and kind of launching UM and
over the top service, if you will. Disney has kind of really taken a very cautious approach because they get a lot of revenue from their traditional pay TV operators almost nine billion dollars in affiliate fees for ESPN and its sister networks from the traditional operators, so they have to be really careful when they go all out with a digital product. And I think this investment so they've been so they've never really made an announcement to launch
and direct consumer product, at least for ESPN content. But this investment kind of shows they're willing to take at least a small step in that direction. And so we'll see how it plays out. And obviously the option for them to go out and acquire the entire unit suggests that they're they're willing to make a bigger commitment. All right, let's go through some of the other areas. For example, the Media networks posting income operating income of two point
three seven billion. The estate was for two point four billion, right, and so I'm just digging through the numbers here, and it looks like UM as expected. You know, the ad revenues were fine, but then the decline and subscribers kind of is tending to weigh. And this has been a drag on the media networks business ever since Disney spoke about subscriber losses last summer UM and it continues to
be an overhang. But I think the bigger, the bigger concern now is going to be the increase in programming costs UM. I mean, Disney has something like about fifty
three billion dollars in just sports commitments alone. The big worry for investors really is, you know what happens when affiliate phase kind of level off, but sports costs continue to rise, and that's exactly what we are seeing both in this quarter as well as going into fiscal twenties seventeen, when we're going to see a huge step up in
NBA fees. Um. You know, that's almost gonna be at increase in sports rights with the twenty four billion dollar deal that innbated with ESPN and Turner, So I think that is definitely going to be a big source of concern. Do you believe that this is one of the reasons why the stock is down eight percent year to date is people are concerned about this spending. Yes, absolutely, I think it's It's been one of the biggest, um biggest,
biggest causes for for worry. Um. You know, the sports rights um have been very, very expensive, and Disney has continued to go out and acquire the best of the best content, but then as you know, affiliate fee pressure has been increasing. I mean, investors are really worrying about
how they're going to defray those expenses. Well, just to give you more detail on that, bam Tech minority acquisition band Techs roster of sports includes the National Hockey League of obviously Major League Baseball, the p g A Tour, as well as Ice Network, the leading digital platform for professional figure skating. So they're gonna have a lot of sports that they can use over there many different media properties. Well that in any way affect the park and resort business.
I don't think so. I think their park and resort business has been, um, you know, a very very steady performer. It contributes about of overall company income. Now, domestic attendance has been slightly weak. Um, it's it's been weakening a little bit. And then there have been you know, there's been some concern who's given all the incidents in in Orlando and and probably you know, weakening trends and attendance
international also especially with the events and in Paris and Brussels. Um, you know, euro Disney has kind of taken a hit there a little bit. But in the big cat list and I think we'll get more color on this during the call. Has been the launch of Shanghai Disney and that should be a big driver for that segment um going forward. It leads into the next three to five years. Thank you very much for spending time with us on a day that I know you're looking to get on
that conference call. Geta Ranana Thumb. She is the technology and Media analyst for Bloomberg Intelligence. Shares of the Walt Disney Company right down, right now are down about a quarter of a percent in after hours trading. Thank you for listening to taking stock. I'm pim Fox and this is Bloomberg. Yeah. Coming up, Bloomberg Law will be talking about Chevron's victory in a long running court battle over toxic waste in Ecuador. We've got the details, but June Grasso