LOS ANGELES — Walt Disney posted better-than-expected quarterly results and raised its annual profit forecast on Wednesday, led by gains in the streaming business, which is expected to be the centerpiece of its growth strategy in coming years.

In the last 24 hours, the media and entertainment company entered two major deals with the National Football League (NFL) and WWE as it readies its $29.99-per-month ESPN streaming service that will give viewers access to sporting events, including the NFL and National Basketball Association.

The entertainment giant is betting that combining its Disney+, Hulu, and ESPN services into a single streaming app will fuel growth of its profitable streaming service and help offset declines in its traditional television business. The company estimates its direct-to-consumer business will generate operating income of $1.3 billion in the fiscal year that ends in September, up 30% from its original guidance.

“We’ll bundle that trio — Disney+, Hulu, and ESPN,” Disney Chief Executive Officer Bob Iger told investors, calling it “an opportunity to lower churn (and) increase engagement.” That bundle will also be offered at $29.99 as a one-year promotion.

Disney said its pivotal deal with the NFL, in which it will acquire the NFL Network and other media assets from the league in exchange for a 10% equity stake in Disney’s ESPN sports network, will allow the company to offer a more compelling experience for football fans. The deal needs regulatory approval.

The company also negotiated exclusive rights to major wrestling events, including WrestleMania and Royal Rumble in the streaming service, set to launch Aug. 21.

“Expect the earlier-than-planned launch of Disney’s ‘ESPN’ streaming service to give Disney’s direct-to-consumer (DTC) business a notable lift in revenue,” said Forrester Vice-President  Mike Proulx.

“Disney is racing full force to sign sports rights with the company’s NFL and WWE announcements. This is yet another signal that the latest battle in the streaming war is all about live sports programming.”

Nonetheless, Disney’s stock fell 3% in early trading, reflecting investor concern about the performance of the traditional television business, which saw a 28% decline in operating income.

“Investors are aware of the decline in linear TV but it was worse than expected,” said Ben Barringer, head of technology research at Quilter Cheviot. “It is an industry-wide trend and very little can be done to arrest it.”

Sports and experiences businesses dominated Thursday’s investor call, as the company expands its global theme parks and adds more vessels to its cruise line.

Chief Financial Officer Hugh Johnston said Walt Disney World posted a record third quarter. He said bookings are up 6% for the fourth quarter. — Reuters

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