October 31, 2015
We’re watching the beginning of the end of the ESPN Empire.
They are still sitting on the throne, and will be until further notice. But they’ve chewed up too much territory and taken over too much property. They’ve invested billions of dollars in NFL, NBA, MLB and college football rights. They’ve not invested nearly enough in talent.
In October they laid off about four percent of the workforce, 300 people.
The Wall Street Journal reported in July that ESPN has lost 3.2 million subscribers in the last year. Cable companies have started moving ESPN to different kinds of tiers to save some money, and that has cost the cable giant some homes as well. They no longer sit in nearly 100 percent of the cable homes as they did for many years. According to Sports Business Daily, they are in 92 million homes. That’s out of the 100 million or so homes that are wired for cable, satellite or some other pay-TV service.
ESPN is the most expensive channel on cable. They get about $6.50 a month from the carriers, who pass along the cost to the subscribers. Do the math. That’s nearly 250 million dollars in lost revenue. CNN reports corporate owner Disney has told ESPN to cut from the budget $100 million in 2016 and $250 million in 2017. Apparently this round of 300 job cuts in October is just the beginning.
ESPN’s problems have been present for years though. They just don’t have the “It” factor any longer. The studio shows are inhabited by a series of nondescript, interchangeable parts.
Their Sportscenter shows – made famous and wildly popular a generation ago by Dan Patrick and Keith Olbermann – are hosted by (Fill in the Blank) and (Fill in the Blank.) They don’t want talent to stand out. They don’t want talent to be too opinionated. Examples: Mike and Mike = Vanilla and Bill Simmons works elsewhere.
ESPN is starting to do what happens in the broadcast business when the CEOs and the Boards panic: getting rid of talented people. We’re not talking about the Simmons, Olbermann and Cowherd talent. Those are all unique circumstances. We’re talking about the people who make the ship run, quality executives and producers who have been there a long time. These are people with institutional knowledge. In the broadcast business – with all due respect to the pretty faces – the people who make it happen. They cost money.
If you’re a sports fan you have to get ESPN. They’ve forced you to do that. They own the rights to so much of what you want to see. They’ve not given you much reason to watch the other stuff. Example: First Take is the most inane program on television, and there are lots of candidates on cable TV for that not-so-lofty position.
Late this week ESPN suddenly shut down its web site Grantland, which was Bill Simmons’ baby. That’s a story to be explained at another time. Another sign the empire is crumbling.