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Investors didn't have a problem bidding up shares of Walt Disney (NYSE:DIS) to an all-time high last week just hours before posting quarterly results.

"It's a trap," Admiral Ackbar of Star Wars fame should've warned. There were more than a few reasons to fear that this wouldn't be Disney at its best. 

  • Its iconic theme parks business would be held back by the shift in the Easter travel holiday from April last year to March this time around.
  • The sophomore year of its Disney Infinity video game franchise wouldn't be as successful as its first year on the market.
  • Disney was lighting up the box office with half of this year's six highest-grossing movies, but the real payoffs come later in the distribution cycle.

Analysts were braced for these unflattering year-over-year comparisons, but Disney still fell short of the already modest top-line growth expectations. But the real dagger in the report -- and why the stock's close on Tuesday was nearly 12% below its peak a week earlier -- was Disney confirming that ESPN subscriptions declined during the quarter. It also suggested that things may not get better in the near term.

This is a pretty big problem. ESPN relies on big contracts with leagues that typically inch higher with each passing season. If subscribers continue to cut the cord and programming costs continue to escalate this isn't going to be a pretty margin squeeze. And if ESPN is struggling, one can only imagine what the outlook has to be for Disney's lesser cable properties.

Media networks is a big part of Disney's business. It accounted for 43% of total revenue in fiscal 2014, and an even meatier 56% chunk of its operating profits. With ESPN losing households, ABC ratings slipping, and cord cutters threatening to live without Disney Channel and ABC Family it's easy to be concerned. 

But against this backdrop we're now just four months away from the first of several Star Wars movies under Disney's watch. The theme parks are posting record attendance, and that's before many of the long overdue upgrades and expansions kick in over the next few years. Will that be enough to offset the potential slide at Disney's media networks? It could be, and that's if media networks take a hit at all. 

Disney knows about the cord cutters, and it's been pushing ESPN as a stand-alone offering or as part of streaming TV packages that millennials are flocking to. If subscriptions continue to decline it's highly unlikely that it will be outbid on contract renewals, and those rates may start to head the other way as pro sports adapt to the new normal. We also can't forget that digital distribution also offers new ways to monetize content. Wasn't Daredevil amazing?

With Disney World technology getting to know guests better than ever before and a strong pipeline of Star Wars, Marvel, Pixar, and namesake releases Disney remains a stock that you should feel comfortable in owning for the long haul. Disney stock deserved to take a hit after last week's unsettling quarterly report, but the correction also presents an opportunity to buy a piece of the Mouse at a discount. The fire sale won't last. 

Rick Munarriz owns shares of Walt Disney. The Motley Fool recommends Walt Disney. The Motley Fool owns shares of Walt Disney. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.