Disney CFO says this one sector is critical for driving customer lifetime value: ‘It’s just on fire’

Good morning. Live sports has become a strategic battleground for media companies and technology platforms competing for consumer attention and advertising dollars. Disney CFO Hugh Johnston also sees it as a driver of customer lifetime value.

Johnston didn’t mince words about the state of live sports. “It’s just on fire,” he said during a question-and-answer session at the Goldman Sachs Communacopia Technology Conference on Wednesday. “People just can’t get enough of it, and our advertisers can’t get enough of it.”

It’s a strategic bet Disney has been building for years: Live sports isn’t just a content category anymore; it’s connective tissue for Disney’s broader consumer ecosystem, from ESPN to Disney .

In its fiscal Q3, Disney’s sports segment, primarily ESPN, generated $4.5 billion in revenue, up 4% year over year, driven by subscription and affiliate fees and advertising, the company reported last month. Entertainment SVOD, which includes Disney and Hulu, grew 11% to $5.53 billion. Across the two segments, advertising revenue topped $2.8 billion, with sports advertising up 5% offsetting a 1% decline in entertainment advertising.

That divergence helps explain why Johnston is leaning into sports. As general entertainment advertising softens, live sports remains a reliable draw for both viewers and advertisers.

“In terms of sports rights, we’re actually pretty well locked up through 2029 or 2030,” Johnston said. He cited “creative deals” with the NBA, NFL, MLB and NHL, giving ESPN its “base load” of marquee content for years.

But Disney (No. 44 on the Fortune 500) isn’t trying to obtain rights to every sports property. Johnston specifically cited Formula 1........

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