Walt Disney Co (NYSE: DIS) is inching down this morning after reporting mixed financial results for its third quarter.
Investors are choosing caution even though the entertainment conglomerate announced a landmark deal between ESPN and the WWE on Wednesday.
According to Disney’s press release today, ESPN will become the exclusive US home for all WWE Premium Live Events – including WrestleMania, SummerSlam, and Royal Rumble – starting next year (2026).
Despite the pullback, Disney stock is up more than 35% versus its year-to-date low in early April.
Significance of ESPN-WWE deal for Disney stock
The $1.6 billion five-year agreement between ESPN and the WWE is not about content acquisition only – it’s a strategic play aimed at supercharging Disney’s streaming ambitions.
WWE offers an exceptionally massive and loyal fanbase – and its live events are widely known to consistently draw millions of viewers.
By bringing these spectacles to ESPN’s new $29.99/month streaming service, the mass media giant is positioning itself to capture a broader audience beyond traditional sports fans.
Moreover, the aforementioned deal reinforces ESPN as a destination for both athletic competition and entertainment, which aligns perfectly with its evolving identity.
According to experts, the WWE agreement is a high-margin opportunity for DIS shares, especially given the advertising potential tied to the tentpole wrestling events.
All in all, the announcement is a bet on sticky content and subscription growth, which could help Disney’s stock price push further to the upside in the second half of 2025.
Third-quarter updates that bode well for DIS shares
While Disney’s revenue came in shy of Street estimates in the third quarter, the company’s direct-to-consumer (DTC) segment posted $346 million in operating income – up from $19 million loss a year ago.
This was driven mostly by improved margins and subscriber growth. Disney+ and Hulu combined added 2.6 million subscribers in the recently concluded quarter.
More importantly, the company’s management sees Hulu’s expanded Charter deal as helping drive a boost of another 10 million to the subscriber number in Q4.
Meanwhile, the Experiences division saw a 22% jump in domestic operating income, fueled by strong cruise bookings and higher guest spending at theme parks.
On Wednesday, Disney also announced plans to merge Hulu and Disney+ into a unified app by 2026, which could streamline user experience and boost ad revenue.
Put together with a near 1.0% dividend yield, Disney shares appear reasonably attractive to own for the back half of 2025.
Should you invest in Disney shares today?
Disney’s latest moves suggest a clear pivot toward premium live content and bundled streaming.
With ESPN’s direct-to-consumer launch set for August 21st and the WWE deal locked in, Disney is laying the groundwork for a sports-first digital future.
Add in the NFL’s 10% stake in ESPN and expanded rights for RedZone and Fantasy Football, and it’s clear Disney stock is doubling down on must-watch programming.
For investors, the ESPN-WWE deal is a signal that Disney isn’t just adapting – it’s leading the charge.
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