A not-so-happily ever after

The House of Mouse is learning that not every story comes with a fairy-tale ending.

Disney fell 7.75% after reporting mixed fiscal Q4 results: The company beat earnings expectations, but missed on revenue. Here’s how Disney’s core businesses performed last quarter:

• Entertainment: Operating income for streaming services surged 39% thanks in part to price hikes, but fell 21% for linear networks, dragging overall entertainment revenue down 6%.
• Experiences: Revenue rose 6% despite a sluggish economy, with cruise demand leading the way.
• Sports: Revenue for Disney’s sports division, led by ESPN, climbed 3%, while domestic operating income declined due to costs tied to the August launch of the new ESPN app and higher programming expenses.

Enter the villain

Another factor weighing on Mickey’s shoulders these days: A blackout battle with YouTube TV.

Since October 31, Disney’s TV networks, including ABC, FX, National Geographic, Disney Channel, and Freeform, have gone dark for roughly 10 million YouTube TV subscribers after the two sides failed to renew their carriage deal before the deadline.

At the center of the standoff is ESPN, Disney’s most valuable channel: Disney reportedly charges YouTube TV over $10 per subscriber per month to carry the sports network. YouTube TV wants a lower rate than the typical pay-TV provider, arguing it deserves a break as the only major distributor that’s still growing these days.

For YouTube TV, the blackout barely dents parent company Alphabet’s $3.3 trillion empire—meaning it can afford short-term pain if it means securing better long-term rates. Disney, meanwhile, has its own version of YouTube TV: Hulu with Live TV, which recently merged with Fubo, giving it a built-in safety net for viewers jumping ship. The clash ultimately pits Alphabet’s patience against Disney’s ecosystem, a showdown of deep pockets versus a deep catalog.

Who blinks first?

It’s day 14 of the Disney-YouTube TV blackout, now the longest carriage dispute in Disney’s history, surpassing last year’s DirecTV standoff. Analysts estimate the standoff is costing Disney about $30 million a week in lost carriage fees. But Disney appears willing to wait it out, with CFO Hugh Johnston stating on the earnings call that this impasse “could go for a little while.”

Still, Wall Street isn’t losing faith. Wells Fargo’s Steven Cahall said Disney’s results “indicate a strong FY26 with final EPS growth above initial guidance and solid direct-to-consumer net adds,” Seeking Alpha reported today. Cahall noted that the fiscal year 2026 and 2027 outlook likely has upside.

For now, it’s less ‘happily ever after’, and more ‘to be continued.’—SY