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ABC/Disney to make cuts

FreddyE1977 said:
The real factor is the big long-term contracts they've committed to with the NBA, NFL, MLB and major College Sports
conferences.
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Keep in mind that contracts and salaries are two different things in the world of accounting.

The real factor is declining real time viewing of all video, cable and broadcast.
 
There are a few factors:

-Cordcutting and cordshaving, less subscribers means less revenue, to the tune of $10+ per lost subscriber, per month BEFORE lost ad revenue
-Less people going to the movies, as movie theaters are where the studios make the bulk of their money
-Less people watching broadcast and cable, more watching Netflix (they wouldn't be starting streaming services if this wasn't the case)
-Linear advertising being less valuable to advertisers than targeted ads on things like Youtube (this applies to radio as well)
-Costly sports contracts (that does affect the bottom line) that were signed before ESPN started declining

Competition for eyeballs is higher than it's ever been. And as an advertiser, I'd rather spend money on more sure bets. With ESPN, I can target men 25+, but if I only need to target Men 25-34 who live in Minnesota and like comic book movies, Facebook and Youtube can give me that audience. ESPN can't (and that market is getting more intelligent every year thanks to big data).
 
As others have pointed out, ESPN's problems are leaking into other divisions. Not only has ESPN taken on many expensive sports contracts, they also have fired or lost a lot of top talent.
 
seatownmedia said:
As others have pointed out, ESPN's problems are leaking into other divisions. Not only has ESPN taken on many expensive sports contracts, they also have fired or lost a lot of top talent.
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Some of the notable sports pundits that lost their ESPN contracts later went to most notably Fox Sports Net and NBC Sports Net both regional and national editions.
 
So, as the bottom of the pyramid loses, the top of the pyramid takes the money they claim to be saving....
 
Anyone who watches sports TV can tell you that there's a lot more competition in this side of the business, and ESPN is being hurt by all the new sports channels, most notably FS1. Are the new channels doing a better job? Not necessarily. But they're splitting the pie into more slices, and that leaves less money for ESPN.
 
This really isn't anything new, considering Disney has been taking hits from Wall Street analysts over ESPN for the last three years. Things to consider from an inside baseball perspective:

1. Media organizations generally make any "right-sizing" of staff and operational costs in the 4thQ. This helps bolster their first quarter numbers reported in Q2.
2. Disney is actively working in the background on reinvention of the ESPN brand and in the process, moving savings from staff cuts through automation and cuts to pundits in front of the camera (which one could argue, they over-hired anyway).
3. This is not a one-shot effort, but something that has been going on in stages over the past three years. They make changes, then watch the results. If revenue/viewership doesn't come up, you take the next step in cutting expenses in an attempt to balance the difference.
 
Kelly A said:
This really isn't anything new, considering Disney has been taking hits from Wall Street analysts over ESPN for the last three years. Things to consider from an inside baseball perspective:

1. Media organizations generally make any "right-sizing" of staff and operational costs in the 4thQ. This helps bolster their first quarter numbers reported in Q2.
2. Disney is actively working in the background on reinvention of the ESPN brand and in the process, moving savings from staff cuts through automation and cuts to pundits in front of the camera (which one could argue, they over-hired anyway).
3. This is not a one-shot effort, but something that has been going on in stages over the past three years. They make changes, then watch the results. If revenue/viewership doesn't come up, you take the next step in cutting expenses in an attempt to balance the difference.
Click to expand...

Except they rarely cut the top earners.....
 
ESPN spinoff is very likely, similar to the ABC Radio division, if the cord-cutting trends continue. They aren't the only game in town anymore but have been operating as if they have been on the top and ignoring the upstarts (now established) NBC and Fox Sports channels.
 
KTN Corp said:
ESPN spinoff is very likely, similar to the ABC Radio division, if the cord-cutting trends continue.
Click to expand...

Absolutely not. Don't think of ESPN as a cable channel. Thing of it as a brand. That's how Disney views it. They are building a massive subscription video streaming business, and ESPN is a big part of it. Soon you'll pay Disney, not your cable company, for sports. They see sports as important as any of their other brands, and that won't change just because people are changing their reception system. Disney is in the content business, not the cable business.
 
KTN Corp said:
ESPN spinoff is very likely, similar to the ABC Radio division, if the cord-cutting trends continue. They aren't the only game in town anymore but have been operating as if they have been on the top and ignoring the upstarts (now established) NBC and Fox Sports channels.
Click to expand...

FS1 especially. With MLB (including postseason), big-time college football and MMA -- which ESPN has totally missed the boat on -- FS1 has some very attractive properties.

NBCSN's main property is still the NHL -- and that relationship has soured with commissioner Bettman's decision to keep the league's players out of the Olympics and NBCSN's subsequent decision not to show any NHL games while the Olympics are going on. (I'd imagine that course of action was dictated by the big bosses at NBC to protect the main network's Olympic coverage by not allowing "little brother" NBCSN to show hockey featuring the best players in the world at the same time.) Premier League soccer has found a nice little niche, but it's never going to be a major ratings getter.

ESPN is still strong in college basketball and football, though, and has NFL games as well. Its unquestioned superiority is in its NBA deal, which it shares only with a mainly non-sports network, TNT. Unfortunately, it's also saddled with the WNBA, which hardly anyone watches, and MLS, with similar problems.
 
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