Disney could use a double dose of cable magic

Some of the magic has disappeared from Walt Disney 's wand. The $170 billion media conglomerate missed second-quarter profit expectations as revenue growth at cable networks ESPN and A & E stalled, sending its share price down some 6 percent. The twin disappointments highlight the need to figure out the shifting habits of TV viewers. Add the search for a new boss, and Chief Executive Bob Iger 's job looks even tougher. The company's cable channels accounted for more than half its second-quarter operating income of $3.8 billion. Fewer college football games in this year's quarter compared with last year's put a dent in the sports network's performance, as its advertising revenue fell 13 percent year-to-year. A bigger concern is that fewer people are signing up for pricey cable packages that include ESPN in the line-up. With more viewers cutting the cord, revenue from the network is in jeopardy. In response, Disney is trying to reach new audiences by including ESPN in video-streaming packages like Dish Network's Sling TV and in offerings from Vice Media, in which it holds a $400 million investment. But those efforts are just starting and have only modestly boosted the number of subscriptions to the sports network. Viceland, the new cable channel on A & E, is essentially a startup and still trying to build an audience of young viewers. More from Breakingviews : Staples-Office Depot flop leaves behind paper cuts Even the usually sunny corners of the Magic Kingdom are under a cloud. Fewer sales of Star Wars products like light sabers and the BB-8 droid sent operating income for the consumer products division down 8 percent to $357 million. Iger is considered one of the savviest Jedis in the media business. Under his reign of more than a decade, Disney's stock price has quadrupled. He's slated to leave in 2018, however, and plans for an orderly succession were upended with the departure in April of heir apparent and former Chief Operating Officer Tom Staggs. Iger assured analysts on a call Tuesday that the board still has plenty of time to pick a new leader, and he doesn't intend to stick around past his contract. It's a reminder, though, that his to-do list is only getting longer. For more independent commentary and analysisfrom Reuters Breakingviews, visit breakingviews.com

Yoshikazu Tsuno | Getty Images

Some of the magic has disappeared from Walt Disney's wand. The $170 billion media conglomerate missed second-quarter profit expectations as revenue growth at cable networks ESPN and A&E stalled, sending its share price down some 6 percent. The twin disappointments highlight the need to figure out the shifting habits of TV viewers. Add the search for a new boss, and Chief Executive Bob Iger's job looks even tougher.