Disney shares continued to fall in postmarket trading today after execs, in a conference call, told analysts that some financial results will come in lower than it expected — due in part to declining pay TV subscriptions for its biggest profit generator: ESPN.

The company says its cable unit’s operating income through the fiscal year ending September 2016 will rise by a mid-single-digit percentage. That’s down from its projection in April for high single digit growth. Revenues will continue to grow by high single digits.

Disney shares, initially down about 2% after it released its June quarter numbers, were down more than 6% after the company revised its forecast.

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The change put CEO Bob Iger on the defensive, especially following a Wall Street Journal report of belt-tightening at ESPN as Nielsen counted a 3.2 million subscriber loss in a little more than a year.

espn1“ESPN has experienced some modest sub losses,” Iger said, although he wouldn’t say how much. But the declines weren’t due to new skinny bundle initiatives that cut out ESPN — like one Verizon FiOS recently launched, and ESPN is challenging in court. About 80% of the drop was due to a fall in multichannel households generally.

What’s more, Nielsen’s numbers “don’t necessarily track the number of subs we get paid on.”

Iger says he isn’t worried about the fate of ESPN, the most expensive basic cable channel, at a time when many consumers are clambering for lower-priced packages. The full pay TV bundle will “remain the dominant package of choice for years to come,” he says. In addition, “ESPN is a must-have brand.”

Still, distributors say that they’re putting all of their programming deals under a microscope looking for ways to serve millennials and others who consider the package to be too expensive. This morning, Charter CEO Tom Rutledge said that his company — poised to become the No. 2 cable operator if federal regulators allow it to acquire Time Warner Cable — wants to create skinny bundles.

Iger says that ESPN’s contracts spell out carriage terms. (He declined to discuss the channel’s breach of contract suit against Verizon, except to say that they’re having “ongoing discussions.”)

But the CEO made it clear that Disney has options if distributors play hardball. He wouldn’t discuss terms of ESPN’s current deals, but “when we enter new deals we will probably take an even longer term view of the threats and opportunities that present themselves in the marketplace” and build in opportunities to sell directly to consumers “if we conclude that that is an attractive alternative to us.”

And while Netflix may make it easy for young adults to eschew the cost of cable TV, the streaming service “has become a really important partner to us…We look at Netflix as more friend than foe. They’ve become an aggressive customer of ours.”

Indeed, “Disney, ABC, ESPN and other products are really well positioned” for online video, he says. When will it be time to pull that trigger? “When we see it, we’ll tell you about it.”

While ESPN dominated the call, Iger offered some reassurance to movie theater owners concerned about experiments — including one between Paramount and AMC Entertainment — that might shrink their window to exclusively offer new releases. “For the kind of movies we make, largely tentpole films, we believe the theatrical window is incredibly important to us” and there’s “no need to compress it,” he says.

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He’s upbeat about the studio business because “we see global motion picture consumption growing,” especially in China where “we’ve seen a massive increase in moviegoing.”

But the business has probably peaked in the U.S.  Sales have flattened and “I don’t think that’s going to change,” he says.