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⚠ Fox: $69.5 Billion and the Charges SinceHigh threat

Walt Disney (DIS) — threat to the moat

Disney paid $69.5 billion for Fox, doubling its capital; restructuring and impairment charges have totalled about $16.1 billion since fiscal 2020, and returns on capital have not recovered.

The biggest risk to Disney's returns is a decision already made. On 20 March 2019 it bought Twenty-First Century Fox for $69.5 billion, half in cash and half in stock1. It recorded $49,085 million of goodwill2, and its invested capital on the repo measure doubled, from $76.6 billion in fiscal 2018 to $157.2 billion in fiscal 20193.

Disney restructuring and impairment charges by fiscal year ($M)5,735FY2020654FY2021237FY20223,892FY20233,595FY2024819FY20251,1399M FY2026Walt Disney Forms 10-K FY2020-FY2025; Q3 FY2026 earnings release
About sixteen billion dollars of charges in six and a half years.

The charges since have been large. Restructuring and impairment charges were $5,735 million in fiscal 2020, including $4,953 million of goodwill and intangible impairments at the International Channels business4, which carried channels including Fox, National Geographic and Star5. They were $654 million in fiscal 2021 and $237 million in 20226, $3,892 million in 20237, $3,595 million in 2024, including $1,545 million for Star India8, $819 million in 20259 and $1,139 million in the first nine months of fiscal 202610. From fiscal 2020 to June 2026 the total is about $16.1 billion11.

Not all of that is Fox. Disney does not tie each charge to the acquisition, and some charges, such as A+E and content written off when streaming strategy changed, would have happened anyway. But the largest single impairment, $4,953 million in fiscal 2020, fell on the International Channels business, and the $1,545 million Star India charge of fiscal 2024 on a business that came with Fox12.

There is also a running cost. Disney's adjusted EPS excludes amortization of intangible assets from the TFCF and Hulu acquisitions, which was $334 million in the third quarter of fiscal 2026 alone13. Investors who use adjusted earnings are looking past that charge every quarter.

The amortization started large. In fiscal 2020 alone Disney recorded $2,846 million of amortization of TFCF and Hulu intangible assets and of the fair-value step-up on acquired film and television costs14. Every year since, part of what Fox cost has been charged against earnings, and adjusted EPS removes it.

Goodwill remains the largest single asset. It was $74,682 million at 27 June 202615, against Disney shareholders' equity of $110,032 million16, so purchase premium accounts for most of what owners' equity represents.

Return on invested capital measures the consequence. It was 14% to 19% before Fox and has been 4% to 11% since17. Below 10% at a normal tax rate through fiscal 2027, it would suggest Fox permanently lowered what Disney earns on its owners' money.

The number that tests this threat
Reported
Restructuring and impairment charges, nine months
$1,139M (9M FY2026), against $437M a year earlier

The running cost of past deals and strategy changes; another year above $1 billion would mean the write-downs are not over.

Source: Walt Disney Q3 FY2026 earnings release ↗
References
  1. ReportedOn 20 March 2019 it bought Twenty-First Century Fox for $69.5 billion, half in cash and half in stock.
    The Walt Disney Company Form 10-K for fiscal 2019 - the acquisition of TFCF (Twenty-First Century Fox) on 20 March 2019 for $69.5 billion ($35.7 billion cash, $33.8 billion in 307 million shares at $110.00), the businesses acquired, goodwill of $49,085 million and the Hulu ownership steps. — FY2019 · publ. November 2019 · source ↗
  2. ReportedIt recorded $49,085 million of goodwill, and its invested capital on the repo measure doubled, from $76.6 billion in fiscal 2018 to $157.2 billion in fiscal 2019.
    The Walt Disney Company Form 10-K for fiscal 2019 - the acquisition of TFCF (Twenty-First Century Fox) on 20 March 2019 for $69.5 billion ($35.7 billion cash, $33.8 billion in 307 million shares at $110.00), the businesses acquired, goodwill of $49,085 million and the Hulu ownership steps. — FY2019 · publ. November 2019 · source ↗
  3. Moat Explorer calcIt recorded $49,085 million of goodwill, and its invested capital on the repo measure doubled, from $76.6 billion in fiscal 2018 to $157.2 billion in fiscal 2019.
    Moat Explorer calculation, repo method (tools_roic_edgar.py logic run on CIK 1744489, and CIK 1001039 for fiscal 2015-2018): return on invested capital 14.1% (fiscal 2015), 15.0%, 14.1%, 18.7%, 9.9% (2019), 4.1%, 4.9%, 5.1%, 5.7%, 7.5%, 11.2% (fiscal 2025). Disney tags total segment operating income as OperatingIncomeLoss: 14,681 (2015), 15,721, 14,775, 15,706, 14,847, 8,108, 7,766, 12,121, 12,863, 15,601, 17,551 (2025). Invested capital (total assets less current liabilities less cash): 67,579 (2015), 70,581, 72,177, 76,588 (2018), 157,225 (2019), 157,007, 156,573, 162,943, 160,258, 155,618 (2024), 157,657 (2025: 197,514 - 34,162 - 5,695). Effective tax rates: 35% cap (2015), 34.2%, 32.1%, 11.3% (2018), 21.7%, 21% assumed (2020 loss), 1.0% (2021), 32.8%, 28.9%, 23.7%, 0% (2025, a tax benefit). 2025: 17,551 x (1 - 0) / ((155,618 + 157,657) / 2 = 156,638) = 11.2%; at a 21% tax rate 17,551 x 0.79 = 13,865 / 156,638 = 8.9%. Invested capital doubled from 76,588 to 157,225 when TFCF was acquired in fiscal 2019. Excluding fiscal 2025 goodwill of 73,294, invested capital would be 84,363, and the 21%-tax NOPAT of 13,865 on that year-end figure is about 16.4%. — FY2015-FY2025 · publ. October 2026 · source ↗
    Method: NOPAT (operating income times one minus the effective tax rate, capped at 35%) divided by average operating invested capital (total assets less current liabilities less cash and equivalents); SEC EDGAR XBRL. Disney's OperatingIncomeLoss tag is total segment operating income, which is before corporate and unallocated shared expenses, restructuring and impairment charges and acquisition amortization, so the ratio flatters the company; the fiscal 2025 figure is also flattered by a zero tax rate.
  4. ReportedRestructuring and impairment charges were $5,735 million in fiscal 2020, including $4,953 million of goodwill and intangible impairments at the International Channels business, which carried channels including Fox, National Geographic and Star.
    The Walt Disney Company Form 10-K for fiscal 2020 - restructuring and impairment charges of $5.7 billion including $4,953 million of goodwill and intangible impairments at International Channels, $2,846 million of TFCF and Hulu acquisition amortization, the 2019 Hulu gain and the launch of Disney+ in November 2019. — FY2020 · publ. November 2020 · source ↗
  5. ReportedRestructuring and impairment charges were $5,735 million in fiscal 2020, including $4,953 million of goodwill and intangible impairments at the International Channels business, which carried channels including Fox, National Geographic and Star.
    The Walt Disney Company Form 10-K for fiscal 2019 - the acquisition of TFCF (Twenty-First Century Fox) on 20 March 2019 for $69.5 billion ($35.7 billion cash, $33.8 billion in 307 million shares at $110.00), the businesses acquired, goodwill of $49,085 million and the Hulu ownership steps. — FY2019 · publ. November 2019 · source ↗
  6. ReportedThey were $654 million in fiscal 2021 and $237 million in 2022, $3,892 million in 2023, $3,595 million in 2024, including $1,545 million for Star India, $819 million in 2025 and $1,139 million in the first nine months of fiscal 2026.
    The Walt Disney Company Form 10-K for fiscal 2022 - the old Disney Media and Entertainment Distribution segment, Direct-to-Consumer operating losses of $1,679 million (2021) and $4,015 million (2022), and restructuring and impairment charges of $654 million (2021) and $237 million (2022). — FY2022 · publ. November 2022 · source ↗
  7. ReportedThey were $654 million in fiscal 2021 and $237 million in 2022, $3,892 million in 2023, $3,595 million in 2024, including $1,545 million for Star India, $819 million in 2025 and $1,139 million in the first nine months of fiscal 2026.
    The Walt Disney Company Form 10-K for fiscal 2023 - the new Entertainment, Sports and Experiences segments with fiscal 2021 and 2022 restated, Linear Networks and Direct-to-Consumer results for 2022-2023, $3,892 million of restructuring and impairment charges including $2,577 million of content impairments, and Mr. Iger's return as chief executive on 20 November 2022. — FY2023 · publ. November 2023 · source ↗
  8. ReportedThey were $654 million in fiscal 2021 and $237 million in 2022, $3,892 million in 2023, $3,595 million in 2024, including $1,545 million for Star India, $819 million in 2025 and $1,139 million in the first nine months of fiscal 2026.
    The Walt Disney Company Form 10-K for fiscal 2024 - Linear Networks, Direct-to-Consumer and Content Sales/Licensing results for 2023-2024, Star India results, restructuring and impairment charges of $3,595 million (Star India $1,545 million, goodwill $1,287 million) and employees at 28 September 2024. — FY2024 · publ. November 2024 · source ↗
  9. ReportedThey were $654 million in fiscal 2021 and $237 million in 2022, $3,892 million in 2023, $3,595 million in 2024, including $1,545 million for Star India, $819 million in 2025 and $1,139 million in the first nine months of fiscal 2026.
    The Walt Disney Company Form 10-K for fiscal 2025 (year ended 27 September 2025) - Item 1 business and MD&A for Sports: ESPN, its channels and rights, and Star India. — FY2025 · publ. 13 November 2025 · source ↗
  10. ReportedThey were $654 million in fiscal 2021 and $237 million in 2022, $3,892 million in 2023, $3,595 million in 2024, including $1,545 million for Star India, $819 million in 2025 and $1,139 million in the first nine months of fiscal 2026.
    The Walt Disney Company third-quarter fiscal 2026 earnings release, Form 8-K exhibit 99.1 - Entertainment results by revenue type, the shareholder letter and segment totals. — Q3 FY2026 · publ. 5 August 2026 · source ↗
  11. Moat Explorer calcFrom fiscal 2020 to June 2026 the total is about $16.1 billion.
    Moat Explorer calculation from Walt Disney reported figures ($ millions unless stated; fiscal years end late September). Experiences: share of total segment operating income 8,954 / 12,863 = 69.6% (FY2023), 9,272 / 15,601 = 59.4% (FY2024), 9,995 / 17,551 = 56.9% (FY2025); nine months FY2026 8,941 / 14,758 = 60.6%; about three-fifths. Experiences share of revenue 36,156 / 94,425 = 38.3%. Entertainment share of segment operating income 4,674 / 17,551 = 26.6%; Sports 2,882 / 17,551 = 16.4%. Segment operating margins FY2025: Experiences 9,995 / 36,156 = 27.6%, Entertainment 4,674 / 42,466 = 11.0%, Sports 2,882 / 17,672 = 16.3%; FY2024: 9,272 / 34,151 = 27.2%, 3,923 / 41,186 = 9.5%, 2,406 / 17,619 = 13.7%; FY2023: 8,954 / 32,549 = 27.5%, 1,444 / 40,635 = 3.6%, 2,465 / 17,111 = 14.4%; FY2022 Entertainment 2,126 / 39,569 = 5.4%; FY2021 Entertainment 5,196 / 36,489 = 14.2%. Domestic Parks & Experiences share of total segment operating income 6,375 / 17,551 = 36.3%; domestic margin 5,876 / 22,677 = 25.9% (FY2023), 5,878 / 23,596 = 24.9% (FY2024), 6,375 / 25,191 = 25.3% (FY2025); Q3 FY2026 2,088 / 7,116 = 29.3%; domestic operating income growth FY2024 5,878 / 5,876 - 1 = 0.0%, FY2025 6,375 / 5,878 - 1 = +8.5%. International margin 1,104 / 5,475 = 20.2%, 1,354 / 6,183 = 21.9%, 1,442 / 6,520 = 22.1%; Q2 FY2026 227 / 1,596 = 14.2%; Q3 FY2026 369 / 1,787 = 20.6%; nine months FY2026 international operating income 428 + 227 + 369 = 1,024. Consumer Products margin 1,974 / 4,397 = 44.9%, 2,040 / 4,372 = 46.7%, 2,178 / 4,445 = 49.0%; Q3 FY2026 560 / 1,065 = 52.6%; share of Experiences revenue 4,445 / 36,156 = 12.3% (about an eighth), of Experiences operating income 2,178 / 9,995 = 21.8% (about a fifth). Experiences capital expenditure 6,429 / 3,659 - 1 = +75.7%; as a share of Experiences operating income 3,659 / 9,272 = 39.5% (FY2024), 6,429 / 9,995 = 64.3% (FY2025). Experiences operating income growth FY2025 9,995 / 9,272 - 1 = +7.8%; revenue growth 34,151 / 32,549 - 1 = +4.9% (FY2024), 36,156 / 34,151 - 1 = +5.9% (FY2025); nine months FY2026 operating income 8,941 / 8,117 - 1 = +10.2%, revenue 29,461 / 27,390 - 1 = +7.6%; company capital expenditure nine months 6,780 / 6,108 - 1 = +11.0%, about 11%. Experiences revenue FY2025 over FY2021 36,156 / 15,961 = 2.27 times. Cruise fleet 6 ships + Destiny + Adventure = 8; + 4 under contract = 12. $60 billion over about 10 years = about $6 billion a year. Media: Linear Networks revenue 9,364 / 12,828 - 1 = -27.0% (FY2022 to FY2025); operating income 2,955 / 5,198 - 1 = -43.2%; FY2025 operating income 2,955 / 3,452 - 1 = -14.4%; margin 5,198 / 12,828 = 40.5% (FY2022), 2,955 / 9,364 = 31.6% (FY2025); linear advertising 2,856 / 4,877 - 1 = -41.4%; linear affiliate fees 6,348 / 7,739 - 1 = -18.0%; FY2025 advertising 2,856 / 3,676 - 1 = -22.3%, affiliate fees 6,348 / 6,872 - 1 = -7.6%. Direct-to-Consumer operating income swing 1,327 - (-3,424) = 4,751 (FY2022 to FY2025); FY2025 margin 1,327 / 24,614 = 5.4%; DTC advertising 3,684 / 3,614 - 1 = +1.9%; advertising share of DTC revenue 3,684 / 24,614 = 15.0%; DTC share of Entertainment revenue 24,614 / 42,466 = 58.0%. Entertainment SVOD margin Q3 FY2026 712 / 5,532 = 12.9%. Entertainment margin Q3 FY2026 1,680 / 11,345 = 14.8%; Entertainment revenue growth FY2021-FY2025 (42,466 / 36,489)^(1/4) - 1 = 3.9% a year; nine months FY2026 revenue 34,669 / 32,258 - 1 = +7.5%, operating income 4,116 / 3,983 - 1 = +3.3%. Content Sales/Licensing and Other margin 392 / 8,488 = 4.6%; theatrical distribution share of revenue 2,592 / 94,425 = 2.7%. Subscribers taking both Disney+ and Hulu 43.7 / 27.1 - 1 = +61.3%. Sports: ESPN Domestic margin 2,814 / 14,636 = 19.2% (FY2022), 2,881 / 14,945 = 19.3% (FY2023), 3,056 / 15,339 = 19.9% (FY2024), 2,801 / 16,085 = 17.4% (FY2025); FY2025 revenue 16,085 / 15,339 - 1 = +4.9%, operating income 2,801 / 3,056 - 1 = -8.3%. Sports affiliate and subscription share of revenue 11,944 / 17,672 = 67.6%. Sports programming commitments FY2026-FY2029 9,894 + 9,797 + 9,540 + 9,101 = 38,332, about $38.3 billion; FY2026 commitments over FY2025 Sports revenue 9,894 / 17,672 = 56.0%. Sports nine months FY2026 operating income 1,701 / 1,971 - 1 = -13.7%, revenue 14,018 / 13,692 - 1 = +2.4%. Sports revenue growth FY2021-FY2025 (17,672 / 15,960)^(1/4) - 1 = 2.6% a year. Star India operating losses 237 + 432 + 636 = 1,305 (FY2022-FY2024). ESPN implied value: 10% for $3 billion = about $30 billion. Affiliate fees FY2025: linear 6,348 + Sports affiliate and subscription 11,944 = 18,292, about $18.3 billion. Advertising FY2025: linear 2,856 + DTC 3,684 + Sports 4,444 = 10,984, about $11.0 billion. Cash, capital and valuation: dividend per share 1.50 (FY2026) / 1.00 (FY2025) - 1 = +50%. Experiences headcount 185,000 / 231,000 total = 80.1%, about four in five. SVOD Q3 FY2026 subscription fee increase 4,715 - 4,116 = 599, advertising increase 851 - 830 = 21; SVOD programming and production costs over SVOD revenue 2,577 / 5,532 = 46.6%, nearly half. Old-basis parks segment operating income 7,905 / 471 = 16.8 times (FY2021 to FY2022). trailing twelve months to June 2026 revenue 94,425 - 71,961 + 76,397 = 98,861, about $98.9 billion; net income 12,404 - 11,091 + 7,287 = 8,600. Restructuring and impairment charges 5,735 (FY2020) + 654 + 237 + 3,892 + 3,595 + 819 (FY2025) + 1,139 (nine months FY2026) = 16,071, about $16.1 billion. Fox goodwill 49,085 / 69,500 = 70.6% of consideration. Goodwill over total assets 73,294 / 197,514 = 37.1% (FY2025); 74,682 / 204,740 = 36.5% (27 June 2026). Buybacks nine months FY2026 7,245 / 68 million shares = $106.5 a share. Fiscal 2026 capital returns at least 9.0bn buybacks + about 2.6bn dividends = about $11.6 billion; free cash flow guided at least 19bn cash from operations - about 9bn capital expenditure = about $10 billion. Nine months FY2026 returned 7,245 + 1,337 = 8,582, / free cash flow 5,735 = 149.6%, about 150%. Net debt 27 June 2026 (8,627 + 37,414 = 46,041) - 5,185 = 40,856; at FY2025 year end 42,026 - 5,695 = 36,331; change 40,856 - 36,331 = 4,525. Unsatisfied performance obligations 16bn / FY2025 revenue 94.425bn = 16.9%. Analyst target 126.61 / 102.19 - 1 = +23.9%, about 24%. Disney market value over Netflix 176.45 / 279.23 = 63.2%, about 63%. Segment bands FY2025 42,466 + 17,672 + 36,156 = 96,294 against reported revenue 94,425 (eliminations 1,869). Nine months FY2026 segment revenues 34,669 + 14,018 + 29,461 = 78,148; Experiences share 29,461 / 78,148 = 37.7%. Year-end market value (31 December after each fiscal year, companiesmarketcap) over net income and revenue: 2015 173.71bn / 8,382 = 20.72, / 52,465 = 3.311; 2016 165.86 / 9,391 = 17.66, / 55,632 = 2.981; 2017 162.04 / 8,980 = 18.04, / 55,137 = 2.939; 2018 164.47 / 12,598 = 13.06, / 59,434 = 2.767; 2019 257.58 / 11,054 = 23.30, / 69,607 = 3.700; 2020 328.02 / 65,388 = 5.017 (loss year); 2021 281.53 / 1,995 = 141.1, / 67,418 = 4.176; 2022 158.43 / 3,145 = 50.38, / 82,722 = 1.915; 2023 165.25 / 2,354 = 70.20, / 88,898 = 1.859; 2024 202.01 / 4,972 = 40.63, / 91,361 = 2.211; 2025 204.17 / 12,404 = 16.46, / 94,425 = 2.162; October 2026 176.45bn / 8,600 = 20.52, / 98,861 = 1.785 - segment totals, trailing twelve months and other derived figures. — FY2015-Q3 FY2026 · publ. October 2026 · source ↗
    Method: Arithmetic on figures reported in Walt Disney Forms 10-K, 10-Q and earnings releases, SEC XBRL, and stockanalysis.com and companiesmarketcap.com market values; each operand is stated in the source line.
  12. ReportedBut the largest single impairment, $4,953 million in fiscal 2020, fell on the International Channels business, and the $1,545 million Star India charge of fiscal 2024 on a business that came with Fox.
    The Walt Disney Company Form 10-K for fiscal 2019 - the acquisition of TFCF (Twenty-First Century Fox) on 20 March 2019 for $69.5 billion ($35.7 billion cash, $33.8 billion in 307 million shares at $110.00), the businesses acquired, goodwill of $49,085 million and the Hulu ownership steps. — FY2019 · publ. November 2019 · source ↗
  13. ReportedDisney's adjusted EPS excludes amortization of intangible assets from the TFCF and Hulu acquisitions, which was $334 million in the third quarter of fiscal 2026 alone.
    The Walt Disney Company third-quarter fiscal 2026 earnings release, Form 8-K exhibit 99.1 - income statement, adjusted EPS, cash flow and balance sheet. — Q3 FY2026 · publ. 5 August 2026 · source ↗
  14. ReportedIn fiscal 2020 alone Disney recorded $2,846 million of amortization of TFCF and Hulu intangible assets and of the fair-value step-up on acquired film and television costs.
    The Walt Disney Company Form 10-K for fiscal 2020 - restructuring and impairment charges of $5.7 billion including $4,953 million of goodwill and intangible impairments at International Channels, $2,846 million of TFCF and Hulu acquisition amortization, the 2019 Hulu gain and the launch of Disney+ in November 2019. — FY2020 · publ. November 2020 · source ↗
  15. ReportedIt was $74,682 million at 27 June 2026, against Disney shareholders' equity of $110,032 million, so purchase premium accounts for most of what owners' equity represents.
    The Walt Disney Company third-quarter fiscal 2026 earnings release, Form 8-K exhibit 99.1 - income statement, adjusted EPS, cash flow and balance sheet. — Q3 FY2026 · publ. 5 August 2026 · source ↗
  16. ReportedIt was $74,682 million at 27 June 2026, against Disney shareholders' equity of $110,032 million, so purchase premium accounts for most of what owners' equity represents.
    The Walt Disney Company third-quarter fiscal 2026 earnings release, Form 8-K exhibit 99.1 - income statement, adjusted EPS, cash flow and balance sheet. — Q3 FY2026 · publ. 5 August 2026 · source ↗
  17. Moat Explorer calcIt was 14% to 19% before Fox and has been 4% to 11% since.
    Moat Explorer calculation, repo method (tools_roic_edgar.py logic run on CIK 1744489, and CIK 1001039 for fiscal 2015-2018): return on invested capital 14.1% (fiscal 2015), 15.0%, 14.1%, 18.7%, 9.9% (2019), 4.1%, 4.9%, 5.1%, 5.7%, 7.5%, 11.2% (fiscal 2025). Disney tags total segment operating income as OperatingIncomeLoss: 14,681 (2015), 15,721, 14,775, 15,706, 14,847, 8,108, 7,766, 12,121, 12,863, 15,601, 17,551 (2025). Invested capital (total assets less current liabilities less cash): 67,579 (2015), 70,581, 72,177, 76,588 (2018), 157,225 (2019), 157,007, 156,573, 162,943, 160,258, 155,618 (2024), 157,657 (2025: 197,514 - 34,162 - 5,695). Effective tax rates: 35% cap (2015), 34.2%, 32.1%, 11.3% (2018), 21.7%, 21% assumed (2020 loss), 1.0% (2021), 32.8%, 28.9%, 23.7%, 0% (2025, a tax benefit). 2025: 17,551 x (1 - 0) / ((155,618 + 157,657) / 2 = 156,638) = 11.2%; at a 21% tax rate 17,551 x 0.79 = 13,865 / 156,638 = 8.9%. Invested capital doubled from 76,588 to 157,225 when TFCF was acquired in fiscal 2019. Excluding fiscal 2025 goodwill of 73,294, invested capital would be 84,363, and the 21%-tax NOPAT of 13,865 on that year-end figure is about 16.4%. — FY2015-FY2025 · publ. October 2026 · source ↗
    Method: NOPAT (operating income times one minus the effective tax rate, capped at 35%) divided by average operating invested capital (total assets less current liabilities less cash and equivalents); SEC EDGAR XBRL. Disney's OperatingIncomeLoss tag is total segment operating income, which is before corporate and unallocated shared expenses, restructuring and impairment charges and acquisition amortization, so the ratio flatters the company; the fiscal 2025 figure is also flattered by a zero tax rate.
Sources
Generated October 5, 2026