Netflix and Paramount continue to vie for Warner Bros. Discovery and from the sidelines Disney CEO Robert Iger thinks the ongoing pursuit – and value being ascribed to assets that include HBO - puts a favorable spotlight on the media company’s own existing IP rather than signaling a need to acquire more.
“If anything, the battle for control of Warner Brothers Discovery I think should emphasize, or cause investors to appreciate the tremendous value of our assets, particularly our IP,” Iger said Monday in response to equity investment analyst questions during the company’s fiscal year 2026 first quarter earnings call.
Those assets include iconic Disney brands and franchises, as well as the powerhouse ESPN sports brand.
“I think we have a great hand. I don't really feel that we have a need to buy more IP,” Iger said. “We're just going to continue to create our own, and we've got an unbelievable bedrock of stories already told to grow from.”
And Disney is working to flex the value of that IP across different but interconnected parts of its business.
In the final three months of 2025 Disney released two studio films – Zootopia 2 and Avatar: Fire and Ash – which each crossed the $1 billion mark at the global box office.
Success of those films helped drive Disney Entertainment segment revenue of $11.5 billion in the quarter, up 7% year-over-year. Entertainment operating income declined by $600 million to $1.1 billion, as higher programming, production and marketing costs more than offset upticks in subscription and affiliate fees and higher theatrical revenue. Disney also released more theatrical films in the quarter, with a total of nine compared to four the year prior.
In addition to box office success, Iger indicated an IP flywheel, where he also called out content IP like Zootopia 2 as benefiting the streaming business by driving increases in viewership of related titles on Disney+.
Per Iger, lifts seen on Disney+ for content related to Zootopia and Avatar, “is enormous in terms of first streams and in terms of hours of engagement.”
Also helping entertainment segment revenue was 11% yoy growth in SVOD revenue to more than $5 billion. Fiscal Q1 SVOD operating income grew by about $190 million to $450 million, resulting in an 8.4% operating margin for the quarter. Disney expects to deliver a 10% SVOD operating margin for fiscal 2026.
Disney is no longer reporting subscriber metrics for Disney+ and Hulu SVODs but disclosed quarterly SVOD subscription revenue growth of 13%.
On the earnings call Disney CFO Hugh Johnston said subscription revenue growth was driven by pricing, subscriber growth in both North America and international markets, and bundling efforts - with the Disney Duo, Trio and HBO Max bundle “all doing well and driving both engagement and revenue realization.”
As for boosting engagement and further utilizing IP, Disney last year inked a landmark deal with OpenAI (which includes a $1 billion investment in the AI company) to allow the licensed use of over 200 Disney characters by genAI video platform Sora.
Alongside plans to add short-form mobile vertical video feeds on Disney+ to encourage daily usage, the company intends to introduce a curated late of Sora-generated content on Disney+ to allow fans to engage with characters and storylines in new ways.
And while IP has helped fuel success on the big and living room screens, Iger also called out what its experiences business is building with theme parks as illustrating the value of Disney IP “beyond the big screen.” For example, citing Zootopia Land in Shanghai as “enormous in terms of both its size and its value.”
According to the CEO, the Zootopia franchise is “an important driver of attendance at Shanghai Disneyland,” noting “the percentage of people that go to Shanghai Disneyland just to go to Zootopia Land is very high.”
In fiscal Q1 Disney’s Experiences segment reported $10 billion in revenue, up 6%. The Experiences unit also saw a 6% yoy uptick in operating income, driven by better results at domestic parks and experiences.
And of course there’s Disney’s ESPN asset – where the company did indeed just bring some new components into the portfolio as it closed a deal to acquire the NFL Network and other media properties, including the NFL RedZone pay TV channel, from the professional football league. In exchange, the NFL got a 10% ownership stake in ESPN, and Disney’s Q-10 filing disclosed fair market value of the deal is $3 billion. Disney retains a 72% stake in ESPN while Hearst holds an 18% stake.
Disney expects to incorporate the NFL Network into its flagship ESPN Unlimited streamer before next football season.
While Disney launched its new ESPN Unlimited DTC offering last fall, it still felt impacts from the pay TV ecosystem in the quarter – during which ESPN (including ESPN on ABC) captured more than 30% of all sports viewership across networks.
The sports segment, primarily comprised of ESPN, reported $4.9 billion in Q1 revenue and a $56 million drop in operating income to $191 million for the quarter. A 10% uptick in quarterly sports ad revenue was more than offset by higher programming and production costs and lower subscription and affiliate fees.
Disney’s sports segment results also took a hit from a carriage dispute with YouTube TV last fall saw Disney channels, including ESPN, temporarily go dark on the virtual MVPD amid the fall football season. The dispute resulted in a $110 million negative impact to Disney’s sports operating income in the period.
Iger on Monday’s earnings call commented on closing the recent NFL deal, which he noted will bring more lucrative sports ad inventory to Disney, as well as help the streaming business.
“We’re really happy that we were able to close it when we did, that enables us to get started sooner than we actually had anticipated,” Iger said. The upcoming NFL season, which concludes with ESPN’s airing of the Super Bowl “is a huge opportunity for ESPN, not only in terms of its ability to manage the NFL Network and RedZone, but also with more NFL inventory. And we know how valuable that is” and will be “particularly for ESPN’s streaming business,” he continued.
Disney total fiscal Q1 revenue grew 5% yoy to $26 billion, while total quarterly segment operating income decreased 9% yoy to $4.6 billion.