The Walt Disney Co. said it is digging in for a lengthy standoff with Google-owned YouTube TV over carriage fees — stoking investor fears over the Mouse House’s struggling TV business and sending its stock plunging more than 9%.
Disney’s impasse with YouTube has put a dent into ABC’s ratings, particularly during its evening news cast. For the first time in months, ABC “World News Tonight” with David Muir drew fewer viewers in the 25-54 age demographic than its rival on NBC.
Disney’s fiscal fourth-quarter earnings report showed that profits from its linear TV division, which includes ABC, fell 21% year-over-year to $391 million.
Hugh Johnston, Disney’s chief financial officer, told CNBC on Thursday that the company “built a hedge” into its forecasts assuming that negotiations with Google could drag on.
“We’re ready to go as long as they want to,” Johnston said.
The House of Mouse reported total revenues of $22.46 billion, missing Wall Street expectations, while operating income dropped 5% to $3.48 billion.
Meanwhile, for the week ending Nov. 7, “NBC Nightly News” beat Disney-owned ABC’s “World News Tonight” in the 25-54 demographic for the first time since July, pulling in 929,000 viewers to ABC’s 883,000, according to Nielsen data.
It’s the second time this year NBC’s flagship news show bested ABC’s in the key demographic, after years of dominance by the latter.
The ratings shift came as Disney’s contract dispute with Google’s YouTube TV blacked out ABC and ESPN to 10 million subscribers.
Still, “World News Tonight,” anchored by David Muir, maintained its lead over “Nightly News” in total viewership, Nielsen data showed. The ABC broadcast drew over half a million viewers more than NBC’s flagship news show.
ABC has “retitled” its news programs, a common practice by all television networks to exclude atypical airings from official ratings averages, according to Variety.
The YouTube TV blackout, which began Oct. 30, is costing Disney an estimated $30 million a week, or $4.3 million a day, according to analysts.
Disney executives sounded pessimistic last week that the impasse would be resolved anytime soon as both sides have dug in to their respective positions.
The maneuver allows networks to exclude episodes with reduced distribution from their season averages, protecting advertiser guarantees.In the case of “World News Tonight,” the broadcast is pre-empted in nearly half of the country on Mondays due to the network’s “Monday Night Football” simulcast.
The YouTube TV blackout comes as Disney has been pushing for higher carriage fees while its traditional TV audience shrinks.
Disney’s streaming business posted operating income of $352 million, up 39%, approaching the $391 million in profits from its linear TV division.
Since early 2022, the company’s stock has traded between $80 and $125 per share — down from a peak of nearly $200 in 2021 — as investors have grown more cautious about the company’s transition to streaming.
The entertainment giant is trying to win back Wall Street with a plan to double its share buybacks to $7 billion and increase its dividend by 50% to $1.50 a share.
The company also reiterated its guidance for double-digit earnings growth in fiscal 2026 and 2027.
Disney shares fell more than 4% before the opening bell on Thursday. It faces an array of challenges on top of its streaming situation.
Analytics firm Antenna reported that a brief suspension of late-night host Jimmy Kimmel in September led to a doubling of cancellations for Disney+ and Hulu, though Disney has not commented on the matter.
Top Disney honchos took Kimmel off the air after the late night host appeared to blame President Trump’s MAGA movement for the assassination of conservative activist Charlie Kirk, sparking outrage.
Disney has also seen mixed results in its film division. The summer’s big Marvel release, “Deadpool & Wolverine,” was a hit, but its most recent comic-themed offering, “The Fantastic Four: First Steps,” was a box office disappointment.
Another challenge is the ongoing search for a successor to Disney CEO Bob Iger, whose contract runs through December 2026.
The company plans to announce a new CEO early next year — with Disney Experiences chairman Josh D’Amaro and Disney Entertainment co-chair Dana Walden seen as the leading internal candidates.
The board is also reportedly considering a co-CEO structure.
Iger returned to the CEO job in November 2022 after his hand-picked successor, Bob Chapek, was fired.
An ABC News spokesperson declined to comment. NBC News didn’t respond to request for comment.
The Post has sought comment from Disney.
How to watch ABC for free without YouTube TV
There are a few other live TV streaming services with channels that YouTube TV customers no longer have access to, including ABC.
DIRECTV offers a free 5-day trial covering all the affected channels with plans starting at just $49.99/month for your first month.
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