The digital-only channel, aimed at eight to 16-year-olds, was launched by Capital Radio in 2002, but is said to be costing up to £750,000 a year to run, while advertising space is proving hard to sell.
Industry magazines are carrying ads offering space on the same MXR regional multiplexes that carry Capital Disney - something that would only become available if an existing station were to close.
Industry insiders have criticised the conflict between the station's brand name and its target audience. While Disney products are traditionally aimed at young children, Capital Disney is intended for "teens and pre-teens" and plays a variety of pop and teen music. Accordingly, audiences are small and advertisers are put off - though GCap has just announced news of a £120,000 sponsorship deal with Nickelodeon for the Capital Disney website.
At the launch, it was revealed the network would use Disney's content and broadcast across 50% of the UK, with a playlist controlled by Capital. Bosses believed the target audience for the service, namely the technology-literate under-16s, would be a major force in the take-up of digital radio in the UK.
Disney has joined forces with Channel 4 in its bid for the second multiplex with a format aimed at eight to 12-year-olds, suggesting that, should Capital Disney fold, the firm would still have a radio platform.
GCap co-owns Fun Radio, a station for young children, which is also involved in the second digital multiplex bid, but as part of the bid by National Grid Wireless.
Disney and GCap declined to comment.
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