Has President Trump Made Disney Stock a Lose-Lose Proposition for Investors After the Jimmy Kimmel Controversy?

Key Points

• Disney's Jimmy Kimmel controversy could have ripple effects.

• It also arguably comes at a particularly bad time for the company.

• However, Disney has several things going for it over the long run.

• 10 stocks we like better than Walt Disney ›

Is the controversy over Jimmy Kimmel's comments regarding MAGA and President Donald Trump in the wake of Charlie Kirk's slaying a few weeks ago on his late-night ABC TV show now over? Maybe not.

Sure, The Walt Disney Company (NYSE: DIS) -- which owns ABC -- quickly ended its suspension of Jimmy Kimmel Live! And the two ABC affiliates that initially refused to air the show following Disney's reinstatement -- Nexstar Media Group (NASDAQ: NXST) and Sinclair (NASDAQ: SBGI) -- have also backed down.

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But this saga playing out in a particularly divided America isn't necessarily finished, at least not for investors. Has President Donald Trump made Disney stock a lose-lose proposition after the Jimmy Kimmel controversy?

Image source: The Walt Disney Company.

Polarization isn't profitable

Following Disney's decision to put Kimmel back on the air, Trump posted his reaction on the Truth Social platform. The president seemed to threaten that he would file a lawsuit against the company. A few days later, Trump also suggested to reporters aboard Air Force One that the licenses of broadcasters that are "against" him should be revoked.

Those comments could simply be bluster. Regardless, Trump has the bully pulpit to keep attacking Disney. If he does, the company could become even more of a lightning rod for Americans on different sides of the political spectrum.

The dilemma for Disney is that polarization isn't profitable. When the company chose to suspend Kimmel's program, many people posted online that they were cancelling their Disney+ subscriptions in protest. Disney+ is a popular streaming service with around 128 million subscribers as of June 30, 2025. On his first night back on the air, Kimmel even joked about the issue, saying that Disney required him to read a statement that provided instructions on how to resume subscribing to Disney+.

But people on either side of this issue could easily cancel their Disney+ subscriptions. They could also cancel subscriptions to the two other streaming services owned by Disney, ESPN+ and Hulu. Or they could boycott any of the other businesses that Disney owns.

A major distraction at a bad time

Such a major distraction is always unwelcome. However, now is arguably a particularly bad time for Disney to be caught up in a highly publicized controversy.

The cord-cutting trend isn't waning. ESPN, the linear broadcasting crown jewel in which Disney owns an 80% stake, saw its U.S. operating income fall by 7% year over year in the second quarter of 2025. Programming and production costs continue to rise, but the number of traditional TV viewers isn't.

In August, ESPN announced plans to acquire the NFL Network. This deal should be good for Disney. However, it must be approved by federal regulators. According to Reuters, the U.S. Justice Department is scrutinizing the transaction.

Disney's actions could also negatively impact its affiliates. For example, Nexstar wants to acquire Tegna (NYSE: TGNA) for $6.2 billion. The deal requires Federal Communications Commission (FCC) approval. And the FCC is chaired by Trump appointee Brendan Carr, who stated on a conservative podcast, "We can do this the easy way or the hard way. These companies can find ways to change conduct to take action on Kimmel or, you know, there's going to be additional work for the FCC ahead."

Can investors win by owning Disney stock?

Some investors might view all of this as a lose-lose situation. Can they win by owning Disney stock? I think so, but it will help if they have a long-term investing time horizon.

Granted, Disney's shares have held up relatively well in the midst of the Jimmy Kimmel controversy, but the stock could still be more volatile than many investors would prefer over the near term.

Wall Street remains bullish about the stock overall. Of the 31 analysts surveyed by S&P Global in September, 24 rated Disney as a buy or strong buy. The consensus 12-month price target reflected an upside potential of roughly 16%.

Disney also has several things going for it over the long run. Its brand remains popular. Kids and families will no doubt still want to go to the company's theme parks for a long time to come. The company is making smart moves to transition to a greater focus on digital content, and its studios continue to deliver blockbuster movies.

The current polarization could be a distant memory in a few years. If so (and maybe even if not), I suspect that long-term investors have a decent shot at winning with Disney stock.

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Keith Speights has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends S&P Global and Walt Disney. The Motley Fool has a disclosure policy.