ESPN's Streaming Expansion in Focus: Can It Power Disney's DTC Growth?

Disney’s DIS latest push into sports streaming puts ESPN’s digital transformation at the center of its Direct-to-Consumer (DTC) strategy. The launch of the standalone ESPN DTC service on Aug. 21, 2025, marks a major milestone in repositioning ESPN as a fully digital sports powerhouse. Designed with AI-driven personalization, multiview, live stats, fantasy integration and commerce features, the new app is tailored for streaming-native audiences and is expected to deepen engagement while expanding monetization opportunities.

Disney’s strategy accelerated in late 2025 with two major moves, such as securing exclusive U.S. streaming rights for all WWE Premium Live Events and finalizing a landmark agreement with the NFL. Under the deal, ESPN will acquire NFL Network and related media assets, while the NFL gains a 10% equity stake in ESPN. The partnership also grants ESPN expanded highlight rights, betting integration and the ability to bundle NFL+ Premium with its DTC platform, enhancing both content depth and Average Revenue Per Paid Subscriber (ARPU).

The enhanced ESPN app will offer fans a more immersive experience, integrating fantasy sports, live betting and personalized sports centers. Subscribers to the Disney+, Hulu and ESPN bundle will also be able to stream ESPN content directly on Disney+, reinforcing Disney’s broader effort to make live sports the backbone of its streaming ecosystem.

According to the Zacks model, Disney’s DTC revenues are expected to grow 7% in fiscal 2025 and 8% in fiscal 2026, supported by ARPU gains, premium sports packages and bundled offerings. ESPN’s streaming growth could become the foundation of Disney’s long-term DTC profitability.

Disney’s Streaming Rivals Challenge ESPN’s Edge

FuboTV FUBO has positioned itself as a sports-first streaming leader, leveraging its niche focus to rival Disney in live sports streaming. FuboTV’s platform bundles over 400 channels, including all major U.S. sports networks, and offers fan-centric features like multiview and real-time highlights. Through antitrust wins against rivals like the Venu venture, FuboTV strengthened its competitive standing. However, despite its innovation, FuboTV faces scale and content-rights challenges against Disney’s dominant sports media portfolio.

Comcast Corporation CMCSA challenges Disney’s dominance in sports streaming through NBCUniversal’s Peacock, which now boasts marquee rights to the NFL, Olympics, FIFA World Cup and NBA (2025-26). CMCSA’s vast broadband and cable network amplifies Peacock’s reach and monetization potential. With 41 million paid subscribers and 18% revenue growth in the second quarter of 2025, CMCSA is translating its traditional media dominance into streaming strength, though maintaining the balance of legacy cable revenues still limits the pace of its full digital transformation.

DIS’ Share Price Performance, Valuation & Estimates

Disney shares have returned 0.5% in the year-to-date period, underperforming both the Zacks Consumer Discretionary sector and the Zacks Media Conglomerates industry, each of which has grown 7.5% over the same period.

DIS’s YTD Price Performance

From a valuation standpoint, DIS stock is currently trading at a forward 12-month price/earnings ratio of 17.32X compared with the industry’s 20.61X. DIS has a Value Score of B.

DIS’s Valuation

According to the Zacks Consensus Estimate, Disney’s earnings are projected at $5.86 per share for fiscal 2025 and $6.48 for fiscal 2026, with estimates holding steady for fiscal 2025 and dipping by a cent for fiscal 2026 over the past 30 days. These figures suggest year-over-year growth of 17.91% in fiscal 2025 and 10.5% in fiscal 2026.

DIS currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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