Why Disney’s Stock is Down Even Though Star Wars Is a Hit

Since its release, Star Wars: The Force Awakens has smashed almost every Hollywood box-office record, racking up more than $500 million in worldwide ticket sales in just its first weekend. Disney’s stock, however, has gone in the opposite direction, slicing more than $10 billion off the company’s market value in the past week.

Why are investors so pessimistic about a company that has such a huge blockbuster on its hands? The answer lies in some of Disney’s other holdings—namely, its cable operation, and specifically ESPN.

There’s no question that Star Wars is a huge hit with movie-going audiences, and experts say it is likely to continue to rack up sales records for some time to come. There are also at least five more movies left in the franchise, not to mention the inevitable theme park additions and merchandising that Disney has planned around the series.

In fact, there’s a strong argument to be made that buying Lucasfilms for $4 billion in 2012 was one of the best media deals in recent memory, since Disney could wind up recouping that purchase price out of the revenues it generates on a single movie.

Disney is also doing well thanks to two other brilliant acquisitions: Marvel Entertainment and Pixar. The comic-book empire has spawned its own blockbuster movie franchises such as The Avengers, as well as TV shows related to Marvel characters, and Pixar has created some of the most popular animated features of all time.

Despite all that, however, investors remain concerned about the ongoing decline in cable revenue, and the biggest part of that is ESPN. The network had been seen as almost invulnerable to digital trends because it has such a stranglehold on sports broadcasting, but it’s clear that it is being affected by cord cutting.

Concern over this ongoing phenomenon was at the heart of a recent downgrade that Disney got from BTIG, in which analyst Rich Greenfield said the problems at the sports network and the loss of cable subscriber revenue more than outweighed the good news about Star Wars.

The important numbers are these: Disney gets almost 45% of its operating profit from its cable division, far more than it gets from its movies—which are great for PR, but don’t do as much for the bottom line. And in the last two years, ESPN has lost about 7 million subscribers. That means about $650 million less in subscriber fees, most of which is pure profit. And there’s no sign that this decline is slowing down or stopping any time soon.

In a nutshell, the BTIG analyst says that even if Star Wars does more than $2 billion in revenue at the box office, it will barely make up for the drop-off in cable revenue. Profits at ESPN will be squeezed even further because the network’s costs have increased so much, he says—it will pay more than $6 billion this year for the rights to future sporting events, and the cost of locking up NBA games alone have tripled.
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As a result, Greenfield says Disney earnings are likely to be substantially lower than other analysts are projecting for both 2017 and 2018, and his price target for the stock is now $90—almost 20% lower than where it was trading just last week before his research note.

Disney CEO Bob Iger suggested in an interview with Bloomberg on Monday that the analyst is wrong about the company, and that the cable side of the business is still in good shape. Iger has also talked in the past about the potential for ESPN to go “over the top” and launch its own Netflix-style digital subscription offering. But until he gets specific about what ESPN will do, the market is likely to continue to worry.

This article originally appeared on fortune.com