By Alex Valentine

Investors in Walt Disney Co. seem to be shrugging off concerns about the growing number of Americans cutting the cord on ESPN and ditching their cable subscriptions.

Shares of Disney plummeted in August when the company acknowledged on a conference call that ESPN had lost 7 million subscribers in the last two years, reaching its lowest number of subscriptions since 2006.

Disney CEO Bob Iger insisted that the drop in subscribers was “no reason to panic,” and four months later, shares of the company have rebounded 17 percent to $111.52 since August, and are up 20 percent from a year ago.

Profit for the fiscal year that just ended increased 12 percent to $8.38 billion, or $4.90 per share from the prior year, on an 8 percent revenue increase.

Analysts expect Disney’s net income to increase 11 percent to $2.43 billion or $1.45 per share in the current quarter.

Disney also raised its dividend in December from 66 cents per share to 71 cents per share, a  sign of the company’s confidence in its outlook.

Much of the buzz surrounding the company is fueled by Disney’s first installment of the Star Wars series, which opens in theaters Dec. 18. The film, titled “Star Wars: The Force Awakens” is expected to shatter the box office record set earlier this year by Universal Studios’ “Jurassic World.”

Disney’s media networks segment, which comprises about 43 percent of the company’s overall revenue, saw a 12 percent revenue increase last quarter, primarily due to higher affiliate fees. According to Nomura Securities, ESPN makes up over half of the operating income generated in Disney’s media networks segment.

Profit margins at Disney are not an issue – not yet, at least. But for some financial analysts, that ESPN number – 7 million lost subscribers – is a serious cause for concern.

“Viewership has been challenged as audiences increasingly watch either time-shifted content or use mobile devices,” according to a note from Bloomberg analysts Paul Sweeney and Geetha Ranganathan.

According to a September study by the Liechtman Research Group, the average cable bill is now $99.10, almost 40 percent more than in 2010.

ESPN makes $6.61 for every cable and satellite subscription, by far the largest affiliate fee of any cable television channel, according to SNL Kagan.

The Bristol, Conn.-based television channel can drive its affiliate fee higher than other channels since sports fans had few alternative options for watching sports television and highlights in the past.

But today, the landscape of being a sports fan is changing. Fans have plenty of sports news options, and no longer have to rely solely on ESPN’s nightly highlight show, Sportscenter, to catch up.

Jason Del Ray of Recode wrote a piece last month citing Twitter’s Moments section and the popularity of Vines on Twitter as the reasons he no longer needs to watch Sportscenter.

When I opened up the question of Sportscenter relevance on Twitter, several sports fans chimed in with opinions similar to Del Ray’s.

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ESPN is available as part of sports bundle packages on wireless cable outlets like Dish’s Slingbox TV, which offers a select few channels, including ESPN and ESPN2, for $20 per month, and does not require an existing Dish subscription. For an extra $5 per month, Slingbox users can add other other ESPN channels like ESPN Classic, ESPNU, and SEC Network.

“We do not see media as an ‘either-or’ discussion. TV viewing for top tier events and programs continue to shatter audience records – with viewing on other platforms like WatchESPN also attracting record audiences,” said a spokesman for ESPN via email. “We’ve reached a point where we no longer distinguish between an impression on TV vs. digital – they complement each other as total ESPN viewing.”

Access to ESPN’s online channels like ESPN3 and WatchESPN are convenient when sports fans aren’t around a television, but they require an existing cable subscription, so those channels still fail to reach “cord-cutters.”

ESPN cut costs through downsizing and restructuring much of its workforce earlier this year. The company fired over 300 employees, or 4 percent of its workforce, in October. It also parted ways with several notable television personalities, including Colin Cowherd, Keith Olbermann, and Bill Simmons, and shuttered Grantland, a long-form journalism publication Simmons created.

“No matter how many times we’ve adjusted course to lead the industry over the years, the decisions affecting our employees are never made lightly. It never gets any easier, but it’s a necessary part of our continued strategic evolution to ensure ESPN remains the leader in sports as well as the premier sports destination on any platform,” said ESPN President John Skipper in an October memo.

But the company that brought us Mickey Mouse still has plenty of revenue streams outside of ESPN and its other television networks.

Disney plans to release one Star Wars movie every year through 2020. In 2009, Disney also bought exclusive movie rights to Marvel’s comic book characters, and has enjoyed a successful run of superhero movies since then, including two “Avengers” movies that grossed over $1 billion combined in the box office.

Disney doubled down on a $200 million investment in Vice News, an alternative news source that promotes itself as “edgy coverage of underreported stories.”

“While Disney is a media conglomerate, we view the company as two distinct yet complementary businesses: media networks, which include ESPN and ABC, and Disney-branded businesses, including parks, filmed entertainment, and consumer product,” said Neil Macker, Morningstar equity financial analyst.

Bruce Leichtman, president and principal analyst for Leichtman Research Group, Inc., said in a research note that the issue for cable television is not necessarily the number of consumers cancelling their packages. He said consumers are leaving their cable packages at the same rate as a decade ago, but very few consumers are coming back into the pay-TV category. Many would leave and come back, primarily for economic reasons, in years past.

While Disney’s earnings and stock price continue to impress investors, many are skeptical of the future for Disney’s media networks segment.

Out of 34 analysts surveyed by Bloomberg LP, 19 had a “buy” rating for Disney’s stock, and 15 recommended to “hold.” The analysts’ consensus 12-month target price for Disney shares is $119.30.

Others, like Neil Macker of Morningstar, think Disney’s diverse intellectual property and strong brand recognition will help it ride out the changing tides of pay-TV.

“We expect the unique content on ESPN and Disney Channel will provide the firm with a softer landing than its peers. The company has moved beyond the historical view of a brand that children recognize, and that parents trust, by acquiring and creating new franchises and intellectual property,” said Macker.