AI-generated analysis, not investment advice. The articles are written by AI, edited, and checked against company filings — but the judgements are opinions and the figures go stale. How this is made · Terms

⚠ Selling the Cable StakesModerate threat

Walt Disney (DIS) — threat to the moat

Disney is selling its half of A+E to Hearst for about $1.2 billion after impairing it by $959 million in nine months.

Disney is exiting cable assets it does not control, and they are worth less than it thought. In July 2026 it agreed to sell its 50% of A+E Global Media to an affiliate of co-owner Hearst "for approximately $1.2 billion in cash"1. In the third quarter it recorded "an impairment of our investment in A+E of $812 million"2, and $959 million for the nine months3.

Disney equity income from A+E ($M)690FY2023539FY2024445FY2025Walt Disney Form 10-K FY2025, Linear Networks equity income
A third smaller in two years, now being sold.

A+E has been shrinking for years. Disney's equity income from it was $690 million in fiscal 2023, $539 million in 2024 and $445 million in 20254. The third-quarter release blamed lower income from A+E "attributable to a decrease in advertising revenue"5.

Disney plans to use the proceeds to buy back shares6, which makes the sale a capital-allocation decision rather than a strategic one. It also removes about $445 million a year of equity income that was falling anyway.

A+E is not the only stake Disney has written down. In the third quarter of fiscal 2025 it impaired its investment in Tata Play Limited by $179 million7, and in fiscal 2025 as a whole equity investment impairments were $635 million8. Disney's minority stakes in television distribution have been losing value for several years.

The broader risk is what the sale price says about cable assets generally. Disney's remaining linear networks earned $2,955 million in fiscal 20259; falling at 14% a year, they too would be worth far less in five years than the accounts imply.

References
  1. ReportedIn July 2026 it agreed to sell its 50% of A+E Global Media to an affiliate of co-owner Hearst "for approximately $1.2 billion in cash".
    The Walt Disney Company third-quarter fiscal 2026 earnings release, Form 8-K exhibit 99.1 - capital allocation, the A+E sale, cost actions, the Consumer Products move and the fiscal 2026 outlook. — Q3 FY2026 · publ. 5 August 2026 · source ↗
  2. ReportedIn the third quarter it recorded "an impairment of our investment in A+E of $812 million", and $959 million for the nine months.
    The Walt Disney Company third-quarter fiscal 2026 earnings release, Form 8-K exhibit 99.1 - capital allocation, the A+E sale, cost actions, the Consumer Products move and the fiscal 2026 outlook. — Q3 FY2026 · publ. 5 August 2026 · source ↗
  3. Moat Explorer calcIn the third quarter it recorded "an impairment of our investment in A+E of $812 million", and $959 million for the nine months.
    Moat Explorer calculation from Walt Disney reported figures ($ 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 - cash, capital returns, debt, goodwill, impairments and valuation. — 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.
  4. ReportedDisney's equity income from it was $690 million in fiscal 2023, $539 million in 2024 and $445 million in 2025.
    The Walt Disney Company Form 10-K for fiscal 2025 (year ended 27 September 2025) - consolidated financial statements: income, taxes, equity, restructuring and impairment charges. — FY2025 · publ. 13 November 2025 · source ↗
  5. ReportedThe third-quarter release blamed lower income from A+E "attributable to a decrease in advertising revenue".
    The Walt Disney Company third-quarter fiscal 2026 earnings release, Form 8-K exhibit 99.1 - capital allocation, the A+E sale, cost actions, the Consumer Products move and the fiscal 2026 outlook. — Q3 FY2026 · publ. 5 August 2026 · source ↗
  6. ReportedDisney plans to use the proceeds to buy back shares, which makes the sale a capital-allocation decision rather than a strategic one.
    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 ↗
  7. ReportedIn the third quarter of fiscal 2025 it impaired its investment in Tata Play Limited by $179 million, and in fiscal 2025 as a whole equity investment impairments were $635 million.
    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 ↗
  8. ReportedIn the third quarter of fiscal 2025 it impaired its investment in Tata Play Limited by $179 million, and in fiscal 2025 as a whole equity investment impairments were $635 million.
    The Walt Disney Company Form 10-K for fiscal 2025 (year ended 27 September 2025) - consolidated financial statements: income, taxes, equity, restructuring and impairment charges. — FY2025 · publ. 13 November 2025 · source ↗
  9. ReportedDisney's remaining linear networks earned $2,955 million in fiscal 2025; falling at 14% a year, they too would be worth far less in five years than the accounts imply.
    The Walt Disney Company Form 10-K for fiscal 2025 (year ended 27 September 2025) - Item 1 business and MD&A for Entertainment: Linear Networks, Direct-to-Consumer, Content Sales/Licensing, subscribers and revenue by type. — FY2025 · publ. 13 November 2025 · source ↗
Sources
Generated October 5, 2026