For the second year in a row, Disney is poised to have another "Star Wars" megahit on its hands with the company on track to sell $130 million in U.S. pre-release tickets for next week's "Rogue One."
But no matter how well it performs at the box office, the film's success may be overshadowed by Disney investors' rising alarm about another part of the Magic Kingdom: ESPN, which is shedding viewers in record numbers.
ESPN was thrust into the spotlight in November when the ratings company Nielsen predicted the sports juggernaut would lose 621,000 cable subscribers that month. Nielsen estimated the sports network would lose another 555,000 subscribers in December.
The challenges ahead are not unique to ESPN. The pay-TV industry as a whole has seen many consumers trim back their cable subscriptions in favor of online video services — or, fed up with the rising cost of TV, forgo cable altogether.
"There's an underlying theme of the bundle being the problem," said Gene Kimmelman, president of the consumer advocacy group Public Knowledge. "People don't want to pay for what they don't want to get."
But ESPN remains one of the world's most profitable sports networks, and its struggles raise troubling questions about the entire TV ecosystem. Long considered the linchpin of the traditional bundle, live sports is often what compels viewers to stay with their cable provider rather than cut the cord. But as more consumers defect in the face of growing cable bills, what is happening at ESPN could end up affecting channels up and down the lineup. And for Disney, one of the world's most powerful media companies, the problems at ESPN risk dampening the success of its other brands, such as Star Wars, Marvel Studios and Pixar.
"Most of the Disney empire is healthy, but its stock price has been suffering to the downside because we have weak subscriber growth at ESPN," said Laura Martin, a media analyst at Needham and Co. "So that weak subscriber growth is a shadow over the whole empire."
ESPN and its siblings, such as ABC, account for the biggest chunk of Disney's business by far, pulling in $24 billion in revenue this fiscal year. The company's next biggest segment, theme parks, made $17 billion.
It wasn't that long ago that observers were calling ESPN "the most valuable media property in the United States," estimating its value at 20 times that of the New York Times Co. and five times the size of Rupert Murdoch's News Corp.
Since hitting a high of nearly $122 in the summer of 2015, the stock has dropped about 14 percent; that includes a 5 percent rally this week.
Although ESPN disputed Nielsen's methodology, the ratings firm ultimately stood by its numbers.
A spokesman for ESPN referred questions to the network's parent company. Disney did not respond to multiple requests for comment.
Last month, in an interview with CNBC, Disney chief executive Bob Iger said he remains confident in ESPN. "We think the long-term revenues are going to be just fine," he said.
ESPN is hardly the only programming company facing long-term pressure as consumers increasingly opt for Internet-based video streaming that undercuts the legacy cable bundle. TV providers such as Dish Network and AT&T have raced to offer packages of traditional channels as Internet-based apps; the outlook for those efforts is still uncertain, but some analysts say ESPN faces a steeper challenge than most because of the rapidly rising cost to the network of acquiring sports broadcasting rights.
"Let's face it - sports has changed," said Jim Hill, a longtime Disney analyst. "It's gotten so expensive ... it's a scary time all around the barn right now for sports, and that's another thing that Disney's eyeballing."
The rights to broadcast live sports cost cable companies a collective $16 billion last year, according to a report from PricewaterhouseCoopers — up 50 percent from 2011. That figure is expected to grow another 30 percent by 2020.
Between the rising content costs and the defection of consumers, some analysts have proposed that Disney spin off its ESPN unit. This week, Steve Cahall, a media analyst at RBC Capital Markets, said the move would allow investors to gain a better understanding of Disney's fundamental profitability. He added it could earn Disney some cash to invest in its remaining businesses, or make Disney an attractive purchase to other companies. Earlier this fall, Liberty Media chairman and longtime media-industry titan John Malone also said that Disney could explore a sale of ESPN.
But some analysts are pushing back against the idea, saying there are institutional and logistical reasons why Disney would be loath to sell off one of its key assets.
Disney's chief Iger tends not to micromanage parts of his business unless he perceives a serious problem, Hill said.
"He's a very, very, very hands-off guy as long as you're making money," Hill said. "The way Iger's thinking is, 'Look, I'm going to keep hands off for a while until you guys figure it out.'"
Media executives are aggressively courting the 20 million U.S. households of cord-cutters or people who have never had a TV subscription. HBO, Showtime and CBS have all launched stand-alone video apps as a way to lure customers into paying for their television content.
ESPN, too, has a streaming app of its own - but it is limited in what cord-cutters can view there. The app reserves its best programming for traditional TV subscribers to prevent too many cable customers from migrating away. Eventually, ESPN may conclude that its subscriber losses are so great that the only way to retain those customers is to begin offering cable content more widely on the app, said Jan Dawson, an analyst at the market research firm Jackdaw Research.
"I do see ESPN eventually doing an HBO Now-style online service," he said. "I think it's inevitable."
Other analysts, however, argue ESPN's outlook is not much worse than other companies in the media business. In fact, cushioned as it is by Disney's film and theme park businesses, ESPN may have some time to reverse its fortunes. By contrast, firms that are almost exclusively about TV, such as Discovery Communications or Scripps Networks Interactive, do not have that luxury, Martin said.
"They're losing subscribers, but they don't have theme parks to protect them," she said.