Walt Disney disclosed steeper-than-expected drops in profitability at its ESPN division, pummeling its stock despite strong results at its movie studio and theme parks.

The company’s shares fell more than two percent in after-hours trading on Tuesday, as Disney blamed heavier-than-expected sports contract costs, including higher rates for NBA broadcasts.

“We are confident in ESPN’s future,” CEO Bob Iger told CNBC Tuesday, adding that over-the-top platforms are the future of TV.

Disney is joining a slew of other media companies getting punished for declining subscriber counts that are eroding their pay-TV businesses.

The company’s media networks unit, which comprises mainly ESPN and its siblings, reported a 3-percent drop in segment operating income versus the same period last year. The unit reported $2.2 billion in operating income versus $2.29 billion in the year ago period.

Analysts have been laser focused on ESPN’s declining subscriber counts. According to Nielsen, ESPN is currently distributed in 86.9 million households, down from 89.8 million during May 2016.

The Nielsen number does not include online-only services such as Sling TV and Sony Playstation Vue that also carry ESPN.

ESPN has yet to launch a streaming version of ESPN that is un-tethered from traditional distribution partners such as cable, satellite and telecom companies which under pin its hefty profits.

However, Disney is planning a new, ESPN-branded stand-alone streaming service.

Disney’s earnings beat expectations, at $2.39 billion, or $1.50 per share, in the second quarter ended April 1, versus $2.14 billion, or $1.30 per share, a year earlier, and the $1.30 a share Wall Street had expected.

The upside came as the theme parks’ operating income rose 20 percent, while studio operating income was up 21 percent in the quarter ended April 1.

Revenue, however, missed estimates, rising 3 percent to $ 13.34 billion. Wall Street was hoping for a 3.4 percent bump.