Will Disney's combined linear TV revenue (Entertainment Linear Networks + Sports segment affiliate/subscription fees) decline by more than 15% YoY in any quarter of FY2026?

The resolution threshold is -15% YoY organic decline in ANY single quarter. Q1 FY2026 organic linear decline was only -4% to -7% — substantially better than the -11% baseline. For any quarter to breach -15%, we would need a near-doubling of the current organic decline rate. The cord-cutting industry trend is 7-9% annually, and rate increases have been partially offsetting subscriber losses (Entertainment: -9% subs, +7% rates). The YouTube TV blackout since October 2025 is the most plausible catalyst for acceleration, but Q1 data (which includes 2+ months of the blackout) does not show acceleration. Disney has pricing power on its sports bundle that provides a buffer. The question spans 4 quarters, giving more chances for a breach, but the structural forces would need to meaningfully worsen. I estimate ~22% probability — possible but requires a significant deterioration from current trajectory.

Breaking this down mathematically: 'combined linear TV revenue' includes Entertainment Linear Networks plus Sports subscription/affiliate fees, normalized for Fubo. Entertainment Linear Networks revenue was -11% for 9M FY2025, and Q1 FY2026 organic decline appears to be -4% to -7%. Sports subscription fees were -2% in Q1. For the combined metric to hit -15%, we would need a severe acceleration in at least one component. Sports has rate increase levers (+6% in Q1) that provide a cushion. Entertainment linear could theoretically accelerate if the YouTube TV blackout drives a wave of cancellations, but there is no evidence of this in Q1. The Fubo normalization actually helps the organic number look worse (removing Fubo's positive contribution), but Q1 already normalized shows -4% to -7%, not -15%. For the remaining 3 quarters, macro conditions would need to deteriorate (advertising recession, accelerated cord-cutting) simultaneously. This is a tail risk scenario, not a base case.

I want to weigh the tail risk more heavily. While Q1 shows manageable decline, several compounding factors could converge in later quarters: (1) The YouTube TV blackout has been ongoing since Oct 2025 — cumulative subscriber attrition could accelerate as customers who initially waited decide to cut the cord permanently. (2) Fubo normalization in Q2-Q4 could reveal worse underlying trends as the one-time comparison distortion plays out differently in each quarter. (3) Advertising revenue already fell -6% in Q1, and a macro slowdown could push this to -15% or worse for the advertising component specifically. (4) The 4-quarter window means we need to survive all 4 quarters without any single breach — and Q3/Q4 have tougher YoY comparisons. (5) Rate increase fatigue — the +6% rate increase in Sports pushed rates higher, but each successive increase accelerates cord-cutting, creating a potential nonlinear feedback loop. This is the 'acceleration beyond managed decline' scenario the committee flagged as an unresolved debate.

Q1 FY2026 organic linear decline of -4% to -7% is the strongest data point. This is well within the managed decline range and nowhere near -15%. The 4-quarter window provides more opportunities for a breach, but the structural cord-cutting rate of 7-9% annually, partially offset by rate increases, makes -15% organic decline unlikely without a major exogenous shock. The YouTube TV blackout is the biggest risk, but its impact was not visible in Q1 (which included 2+ months of blackout). ESPN's subscriber base at ~61M is declining but still large enough that rate increases provide meaningful offset. Probability around 20%.

The question resolves YES if ANY quarter breaches -15% organic decline. While Q1 was manageable, the remaining 3 quarters face different dynamics: (1) YoY comparisons get harder as we lap FY2025 quarters that already showed meaningful decline, (2) the YouTube TV blackout enters its second half, potentially driving incremental cancellations, and (3) a potential advertising downturn could compound subscriber revenue losses. However, the Sports segment's rate increase lever is powerful (+6% rates offset -4% subscriber declines in Q1), and Entertainment also showed +4% rate increases. These pricing tools give Disney room to manage the decline rate. The Fubo normalization is a wildcard — in some quarters it may make organic decline look worse. I lean toward 25% — meaningful tail risk but not the base case.

Taking a more skeptical view of the acceleration narrative. The cord-cutting trend is well-established and Disney has been managing it for years. The -11% baseline was for 9M FY2025, and Q1 FY2026 actually showed improvement to -4% to -7% organically. To reach -15%, the decline rate would need to roughly double. Historically, cord-cutting has been a gradual, predictable trend — sudden accelerations to this magnitude are rare. The YouTube TV blackout affects a subset of Disney's distribution but YouTube TV represents only a fraction of the total linear subscriber base (~8M subscribers out of Disney's ~61M ESPN subscribers, for example). Even if all YouTube TV subscribers with Disney channels cut the cord (which they won't — many would switch providers), the incremental impact is bounded. Disney also has contractual protections in many carriage agreements. The -15% threshold is quite aggressive.

Q1 organic decline at -4% to -7% is far from the -15% threshold. Rate increases offset subscriber losses. YouTube TV blackout impact not yet visible. Four-quarter window adds some probability but the gap to -15% is large. About 20% probability — possible but requires significant deterioration.

The 4-quarter window is the key risk multiplier. Even if any single quarter has only ~6-8% chance of breaching -15%, across 4 quarters the cumulative probability rises. YouTube TV blackout could have delayed impact. Advertising revenue decline (-6% in Q1) could worsen in a downturn. Rate increase fatigue is a real concern for later quarters. Assign ~25% for the full-year window.

The simplest read: organic decline in Q1 was -4% to -7%, baseline was -11%, and the threshold is -15%. The trend is actually improving from the baseline, not worsening. Disney has multiple levers (rate increases, bundle restructuring, Fubo integration) to manage the trajectory. -15% requires a step-function change that is unlikely given current trends.