ESPN Layoffs and Its Future...

[billyjack]

Today as the FS1 Update thread has touched on, ESPN has laid off 100 or so employees, including many recognizable names and faces.

Among those let go are:
Dana O'Neil.
Eamonn Brennan.
Jayson Stark.
Jim Bowden.
McMurphy.
Most every hockey guy.
Others...

The ESPN trajectory has been consistently pointing downward. What are their expectations with these layoffs? Will they stop the slide? Are they just looking at a slow but continued retreat?

The slide is a result in large part to people cutting cable, which is expensive, and which now has competition through live streaming etc. Part of it is also many sports fans' irritation with ESPN for their manipulation and manufacturing of sports news, and promoting only their own interests, while ignoring everyone else.

On one site, i forgot where, someone compared them to old MTV... a channel that transformed itself so much that it became unrecognizable to its original form.

For me, i rarely if ever watch ESPN. Occasionally ESPN-U only. MLB news i totally go to the MLB Network... why would i watch Baseball Tonight on ESPN, when MLB Network provides wall to wall baseball coverage, with better analysis and discussion.

Anyway, i was wondering what everyone thinks... are we looking at an ESPN Titanic situation?

[NJRedman]

ESPN isn't losing money they just haven't been growing so the Wall Street folks demanded a blood letting.

[xusandy]

Diminishing ESPN is good news, as far as I'm concerned. In recent years they've been the be-all-and-end-all arbiter of what sports fans should watch and pay attention to -- to the detriment of other sports and leagues (eg. BEAST) which they don't cover very much. The more ominous message here is that more sports programming, though available for purchase, may not be the answer for national channels; there's waay too much already on (motocross, snowboarding, or even curling in prime time?!) FWIW, I'm pretty comfortable with our relationship with FOX at present,though ripples and changes due to ESPN's recent announcement are sure to permeate the entire world of sports broadcasting.

[Savannah Jay]

As someone (okay, me) mentioned on the conference TV contract thread, the loss of 12 million subscribers in the last 5 years (at 6.60 per month, per subscriber) is a loss of almost $1B in revenue for ESPN. In addition, their ratings are down in most categories, which means their ad revenue is down as well. Even so, during that same 5 year period, ESPN kept buying up broadcast rights for premium prices. (Funny, there's a lot of posters concerned about Fox and FS1/FS2 but no one's concerned about ESPN's future, which is the beast that's feeding the football 5).

I've also read that about half of ESPN's current 88 million subscribers never watch it, even though they are still charged the 6.60 every month, hence much of the cord cutting (not just for ESPN, but for the ridiculous sums we pay for cable yet only watch about 10% of the channels).

This is as much about recognizing the trends of diminishing revenue (with no end in sight) and bowing to pressure from investors (as NJRedman suggested).

Agree with XUSandy, too, that ESPN decided they were the gate-keeper of what sports news was shared and how, and even became part of the stories they covered (like the Espys). Knocking them down a few notches and some healthy competition from other outlets seems like a good thing for sports fans.

[BEwannabe]

It's the leading edge of the SNAP demographics of which I have 2 kids that are card carrying members. This demographic doesn't even know of their impact but they're all cord cutters and while they pay for premium content with the likes of Netflix they catch their sports on a mobile device or laptop. Major issue for the Big Leagues and obviously for their preferred carriers.

Just a peak at FS1 and Big East, by the time the next contract is negotiated, the Baby Boomers (cord huggers) youngest viewer will be 61- 62 (maybe 63-64 not sure contract term) years old. Not exactly a ripe propensity to spend audience. It's not an ESPN only problem but with ESPN being the 800# GORILLA they'll be impacted the quickest and to the greatest extent.

[GoldenWarrior11]

This is really bad for the American. If ESPN is cutting costs because revenue is really down, I have a hard time believing that they will break the bank and give them a truly market-competitive deal. Fox doesn't need the content, and NBC/CBS certainly doesn't need the content either.

If the AAC doesn't get a substantial increase in payouts, then you could have UConn - which is basically getting a huge payout from the war chest of the old Big East, which will evaporate soon - start looking for an alternative for their Olympic sports.

[NJRedman]

It's the leading edge of the SNAP demographics of which I have 2 kids that are card carrying members. This demographic doesn't even know of their impact but they're all cord cutters and while they pay for premium content with the likes of Netflix they catch their sports on a mobile device or laptop. Major issue for the Big Leagues and obviously for their preferred carriers.

Just a peak at FS1 and Big East, by the time the next contract is negotiated, the Baby Boomers (cord huggers) youngest viewer will be 61- 62 (maybe 63-64 not sure contract term) years old. Not exactly a ripe propensity to spend audience. It's not an ESPN only problem but with ESPN being the 800# GORILLA they'll be impacted the quickest and to the greatest extent.

And the networks/leagues will start to charge for that. It wont be free. ESPN can easily go to a full streaming model charging $20-$30 a month a people will pay for it when it's the exclusive home of big time sports properties.

[DudeAnon]

ESPN just happened to be caught on the wrong side of the sport's rights bubble. The fact is the internet has changed and will continue to change the sports consuming process. Me personally, I care for 3 sports. NBA (playoffs only typically), NFL and College basketball. Due to the internet there is no reason each of those could not be sold directly to me bypassing ESPN and any other middle men. I imagine that will eventually be the case.

[Dwon]

This sure is a smart move by ESPN because I was getting tired of seeing the same ol boring people on there

[gtmoBlue]

We have several older threads on this and related topics.

To clarify: Yes, ESPN is losing money. They are down to 88 Mill. subscribers from 98 to 101/102 mill a few years ago. They continue to lose money on the Longhorn Network deal with UT. They are tied to cable extensively, have strongly resisted changing their business model, and are hemorrhaging steadily. What happens when they hit a breakpoint and have to miss a rights fees payment, or ask to restructure right fees deals? Will the various league lawyers sue, cry breach of contract, bail to other networks? Exciting times indeed.

Disney is not happy with their heavy spending, but shitty ROI, and started reeling the WWL in over the last 2 years. ESPN cannot go "all in" on online streaming as to do so would mean abandoning their cable base-abandoning their bread n butter, plus having to invest to build up www infrastructure to handle such a move or pay owners of current streaming to add their content. Again, the folks in Bristol are quite resistant to porting content online as it subtracts from their cable based foundations.

Cable, as we have known and come to love it is dying in front of us - a slow death. Streaming video, etc., as we know it may well be only a bridge, to whatever comes next- (think vinyl records, 8-tracks, cassettes, CD, DVD... Napster, pay downloads, sharing... Or tv, movies, VHS, Beta, CD/DVD/Blue Ray...Pirate Bay, other downloads, sharing, etc.). The online streaming, online sharing platforms are growing, however - online viewing is developing and changing. We have not seen the Primary game changer, Yet. One thing is certain, costs structures will change and costs will come down, as folks will merely move to a lower priced website or opt to be more selective in what they watch. If Fox, CBS, ESPN, or whoever thinks they will see $30-40/mo? They might for a few months until folks switch to the next big thing-for less. People will demand PPV vs paying monthly online subscriptions or a tailored subscription for a tiered price. A cable-type pay structure is dying along with cable.

The networks have their TV, their cable, and their online setups and are better structured and organized to be more flexible and accommodating to change. It 's gonna be interesting to watch this scenario play out - while becoming cheaper to watch content.