One Wall Street firm just downgraded Disney and pointed its finger straight at ESPN

ESPN is becoming a problem for Disney.

In a note to clients on Friday, Barclays analyst Kannan Venkateshwar downgraded shares of Disney to "Underweight" from "Equal Weight," citing increasing investor attention around the struggles at ESPN, Disney's flagship sports network.

Barclays argues that as the traditional cable bundle begins to fall apart, ESPN - which as we've noted time and again is the most expensive network for carriers to broadcast - is the most exposed to what Venkateshwar calls a "secularly fragmenting media environment."

And this argument basically says the traditional cable bundle is going away and not coming back.

Here's Venkateshwar (emphasis ours):

In a secularly fragmenting media environment, ESPN is the most exposed. This is because ESPN's business model depends on the cross subsidy of the pay TV bundle. Consequently, given ESPN's fixed cost structure and variable revenue model, subscriber losses are likely to have a disproportionate impact on the business model. In our opinion, ESPN accounts for a disproportionate share of Disney's cash flow and the gap between OCF (7%) and EBIT growth (17%) over the last 2 years likely already points to this pressure from subscriber losses. This issue could be compounded by potential step ups in cost recognition.

Earlier this week we highlighted research from Rich Greenfield at BTIG, who argued that Disney will not be able to package ESPN into a Netflix-like offering and turn the same kind of profit it now enjoys.

And in Greenfield's view, this in part reveals that ESPN is overearning for Disney, or enjoying an artificial pricing-power advantage over its cable peers because of the bundled nature of today's cable offerings.

As this dynamic falls apart, so does ESPN's advantage in the industry and its financial edge for Disney.

Venkateshwar also argues that the bull case for Disney continuing to outperform its media peers is the strength of its box-office performance, namely the "Star Wars" franchise and the success of recent hits like "Frozen."

But Venkateshwar thinks this is a rosy assumption given that when you back out the "Frozen" boom the company enjoyed over the past couple of years, studio and merchanidzing revenue was flat.

But "Frozen" did happen, and the runaway success of "Star Wars" has been very real as well, and so playing down these home runs is something other analysts or investors could take issue with. But the most likely outcome, at least in Venkateshwar's view, is that these major hits sort of mean revert and no longer cover up for the rest of the studio business.

In premarket trade on Friday, shares of Disney were down 3%.