YouTube TV Blackout Is Costing Disney an Estimated $4.3 Million per Day in Lost Revenue

Morgan Stanley analysts project Disney is incurring an estimated $30 million weekly revenue loss, totaling a $60 million headwind for its Q4 2025 earnings, due to the ongoing blackout of its networks on YouTube TV, which is also expected to reduce adjusted EPS by 2 cents per week. The pricing dispute has prompted YouTube TV to offer subscriber credits amid reported churn, while Disney continues to advance its direct-to-consumer strategy, evidenced by the successful launch of ESPN Unlimited, which analysts forecast will add $500 million in subscription revenue by FY26 from an estimated 3 million subscribers.

Analysis

Disney is facing an estimated $30 million weekly revenue loss, totaling a $60 million headwind for its Q4 FY25 earnings, due to the ongoing blackout of its networks on Google's YouTube TV. This 12-day dispute, centered on pricing disagreements, is projected by Morgan Stanley analysts to reduce Disney's adjusted earnings per share by 2 cents per week. The financial impact is significant as Disney prepares to report Q4 FY25 earnings on November 13, with analyst consensus at $22.78 billion in revenue and $1.02 EPS.

The blackout is also creating subscriber churn for YouTube TV, with a survey indicating 24% of subscribers have canceled or intend to cancel, prompting YouTube to offer a $20 credit to mitigate further losses. This highlights the competitive pressures within the virtual pay-TV market, where YouTube TV holds over 10 million subscribers, making it the largest U.S. provider.

Despite these near-term challenges, Disney's direct-to-consumer strategy shows promise with the successful launch of ESPN Unlimited. Analysts project this standalone streaming package will attract 3 million subscribers by September 2026, contributing an estimated $500 million in subscription revenues for FY26. This initiative underscores Disney's strategic shift towards streaming, offering a long-term growth driver independent of traditional carriage disputes.

Investors should closely monitor the resolution of the YouTube TV blackout and its specific impact on the upcoming earnings report. The success of ESPN Unlimited, however, provides a positive counter-narrative, indicating robust progress in Disney's streaming ambitions that could offset some traditional media segment volatility.

Key Decisions for Investors

• Monitor the resolution of the Disney-YouTube TV dispute, as its duration directly impacts Disney's near-term revenue and EPS, and could signal future carriage negotiation dynamics.
• Evaluate Disney's upcoming Q4 FY25 earnings report on November 13 against analyst expectations, paying close attention to any specific guidance regarding the blackout's financial impact and subscriber trends.
• Assess the long-term potential of ESPN Unlimited, considering its projected subscriber growth and revenue contribution as a key driver for Disney's direct-to-consumer strategy, independent of traditional distribution challenges.