Sports juggernaut ESPN has more room to run.
Disney boss Bob Iger is confident the channel — already the highest-priced network on TV — can keep jacking up rates despite pushback over rising cable bills.
Disney posted lower profit in the quarter ended Dec. 29, dragged down in part by the rising cost of acquiring football and other TV sports rights for ESPN.
Iger insisted, however, that ESPN will be able to recoup those costs by increasing fees that cable and satellite-TV providers pay to carry the sports channel.
“We will continue to raise rates,” Iger said yesterday in an interview with CNBC. “We won’t do that in a cavalier fashion.”
ESPN currently charges distributors $5 per household per month — the most of any network, according to research firm SNL Kagan. Rising fees are starting to worry consumers who usually end up shouldering the costs in their cable bills.
But Iger defended higher rates for ESPN, saying customers are getting more for their money through add-ons such as the WatchESPN mobile app.
After shelling out for pricey sports deals, Disney’s cable networks division, which houses ESPN and is usually the biggest driver of profit, reported a modest 1.8 percent gain in operating income for the fiscal first quarter.
Overall, Disney reported profit of $1.38 billion, or 77 cents a share, down from $1.46 billion, or 80 cents a share, a year ago.
Revenue rose 5 percent to $11.3 billion, topping Wall Street’s expectations for $11.2 billion.
Profit was also weighed down by the movie division, where operating income fell 43 percent. The studio faced tough comparisons with a year ago, when Disney released “Cars 2.”
Iger touted the fact that Disney will be rolling out a slew of “Star Wars” movies, starting in the summer of 2015, as well as some stand-alone movies featuring spinoff characters.
The stock rose 1.7 percent in after-hours trading after closing at $54.29.