ESPN has investors really worried

[mvcg66b3r]

ESPN to Lay Off On-Air Talent

ESPN plans to lay off on-air talent, TheWrap is told.

The cuts will come from across the board, and the list of affected staff members is still being finalized.

“We have long been about serving fans and innovating to create the best content for them. Today’s fans consume content in many different ways and we are in a continuous process of adapting to change and improving what we do. Inevitably that has consequences for how we utilize our talent. We are confident that ESPN will continue to have a roster of talent that is unequaled in sports.”

The huge company has more than 1,000 people that would fall under the broad “on-air” category, by the way.

http://www.thewrap.com/espn-lay-off-air-talent/

 

[Silkie]

"Disney stock slammed as ESPN loses subscribers"

Walt Disney is probably rolling over in his grave...or his kryogenic chamber if he really had himself frozen.

 

[TheBigA]

They already lost some big ticket talent like Mike Tirico. Their biggest expenses are in their rights fees for certain sports.

 

[seatownmedia]

They already lost some big ticket talent like Mike Tirico. Their biggest expenses are in their rights fees for certain sports.

In addition to Tirico, Colin Cowherd, Skip Bayless, Bill Simmons, and Keith Olberman have recently exited. (For Keith, his 2nd exit from the network).

 

[joebtsflk1]

They already lost some big ticket talent like Mike Tirico. Their biggest expenses are in their rights fees for certain sports.

If this trend holds, it isn't just the people working at ESPN or any of the other sports nets who should be worried...

 

[seatownmedia]

If I understand your post, you are saying it isn't the media talent, is it the sport talent that makes or break any broadcast. I tend to agree with this to some extent. However, a good announcer can make a good event into a great event. Al Michaels, Keith Jackson, Brent Musburger, and countless others have proven this.

 

[MarcB]

In addition to Tirico, Colin Cowherd, Skip Bayless, Bill Simmons, and Keith Olberman have recently exited. (For Keith, his 2nd exit from the network).

Colin Cowherd has been gone since July 2015. Originally he was supposed to leave at the end of his contract at the end of July of that year but was suspended in mid-July. Since September 2015 he's been with FOX Sports Radio.


Anyway if ESPN eventually goes toes up completely - Bristol the city where I grew up and lived for 20 years will go toes up as well. ESPN is the largest employer in Bristol and the largest tax payer as well.

 

[TheBigA]

Anyway if ESPN eventually goes toes up completely - Bristol the city where I grew up and lived for 20 years will go toes up as well. ESPN is the largest employer in Bristol and the largest tax payer as well.

Very unlikely. Disney isn't the kind of company that changes bases of operation very much. What's happening here is also happening at Viacom and MTV. A retooling of the company from primarily cable-based to multi-platform.

 

[CTListener]

Very unlikely. Disney isn't the kind of company that changes bases of operation very much. What's happening here is also happening at Viacom and MTV. A retooling of the company from primarily cable-based to multi-platform.

But ESPN is only in Bristol by happenstance. The idea that it may someday move to Hollywood or New York City has been out there for years. If the bottom line gets really bad, couldn't a move as part of a corporate consolidation in one of the major media centers be a possibility?

 

[TheBigA]

couldn't a move as part of a corporate consolidation in one of the major media centers be a possibility?

As I said, it's not how Disney works. There's a reason why the founders chose Bristol, I'm sure there are tax benefits for being there. Certainly the lifestyle is better than downtown Manhattan. If you take a look at every division of Disney, there has not been any move towards corporate consolidation, at least in terms of geography. Same with Viacom.

 

[FreddyE1977]

But ESPN is only in Bristol by happenstance. The idea that it may someday move to Hollywood or New York City has been out there for years. If the bottom line gets really bad, couldn't a move as part of a corporate consolidation in one of the major media centers be a possibility?

The cost of operating in Bristol, Connecticut is infinitely cheaper than in either
Hollywood or New York.

 

[joebtsflk1]

If I understand your post, you are saying it isn't the media talent, is it the sport talent that makes or break any broadcast. I tend to agree with this to some extent. However, a good announcer can make a good event into a great event. Al Michaels, Keith Jackson, Brent Musburger, and countless others have proven this.

True, a good play by play can make all the diference. Just think of Ronald Reagan calling baseball recreations at WHO off of teletype info. No wonder he was the Great Communicator.

But the bigger danger is the drop in the rights fees to the pro sport teams and the leagues. Same with the NCAA. Those huge contracts will have to start coming down to earth if fewer people choose to feed the ESPN etc pig.

 

[KeithE4]

But the bigger danger is the drop in the rights fees to the pro sport teams and the leagues. Same with the NCAA. Those huge contracts will have to start coming down to earth if fewer people choose to feed the ESPN etc pig.

The pro leagues pay their players out of TV money, while the colleges, IIRC, get lots of dough for their athletic departments. In the pro's cases, they have CBAs to honor, so salaries cannot be cut. Expect one or more labor disputes if the leagues have to cut player salaries due to lost TV revenue.

 

[Y2kTheNewOldies]

Cuts Coming to ESPN soon

As more Americans cut the cable cord, ESPN has seen its subscriber numbers drop steadily, forcing Disney to demand cost-cutting from the “worldwide leader in sports.” It’s been widely reported since March that the next big round of ESPN layoffs will hit on-air talent, but now we know more on the timing: the cuts will begin on May 1, sources at ESPN tell Yahoo Finance.

ESPN will part ways with more than 40 people, all of them “talent,” a label that ESPN applies to radio hosts and writers (almost all of whom regularly do video or audio), not just traditional TV personalities. ESPN says it has 1,000 people in the category. Still, you can expect most of the people cut to be faces you’ve seen on TV. In some cases, ESPN may buy people out of existing long-term contracts—as Sports Illustrated points out, that is unusual.

The cuts will mostly be done by May 9, when Disney announces its quarterly earnings, but could extend until May 16, when ESPN presents its annual Upfronts in Manhattan.

In a statement, an ESPN spokesperson said the approaching cuts are about innovating to suit the needs of consumers: “Today’s fans consume content in many different ways and we are in a continuous process of adapting to change and improving what we do. Inevitably that has consequences for how we utilize our talent. We are confident that ESPN will continue to have a roster of talent that is unequaled in sports.”

ESPN’s last major layoff round was in 2015, when it cut around 300 employees—a much larger number than is coming in May, but this time it’s viewer-facing, recognizable names. Before that, ESPN cut around 300 people in 2013, so we see a recent pattern of big layoffs every two years.

The reasons are clear if you’ve followed the fallout of cord-cutting: ESPN (and Fox Sports 1 just as much) is seeing viewership fall and rights fees continue to rise. ESPN pays fat fees for the right to show Monday Night Football ($1.9 billion per year through 2021), NBA games ($1.4 billion through 2025) and the College Football Playoff ($600 million through 2026), to name just a few. Its total programming costs are up to $8 billion this year. The situation is not tenable.

Disney does not break out the financials of ESPN, but includes it in its media division. In Disney’s fourth quarter of 2016, revenue for its media division fell 3% and revenue for cable networks fell 6.8% year over year. Disney did say that ESPN had “lower advertising and affiliate revenue” in the quarter. In Disney’s first quarter of 2017, revenues in the media division fell 2% and operating income fell 4% year over year. Again, the causes were higher programming costs, fewer subscribers. In October of last year, ESPN had its worst month ever, losing 621,000 subscribers, according to Nielsen.

http://finance.yahoo.com/news/espn-...y-161210167.html?soc_src=social-sh&soc_trk=ma

The blame here is that the audience is moving somewhere else.

 

[KeithE4]

http://finance.yahoo.com/news/espn-...y-161210167.html?soc_src=social-sh&soc_trk=ma

The blame here is that the audience is moving somewhere else.

Actually, it's the 2/3 (if not more) of the audience that has been required to pay for ESPN but never watched it that are moving somewhere else. Us sports fans will still be there until ESPN and the other sports networks can come up with a way for us to watch without cable/satellite. A la carte is a non-starter, and so is paying $50 a month for each channel, if offered online. That's about what it would require to keep revenue at the level where they can pay all those ridiculous rights fees that the leagues/conferences extort from them.

 

[CTListener]

Actually, it's the 2/3 (if not more) of the audience that has been required to pay for ESPN but never watched it that are moving somewhere else. Us sports fans will still be there until ESPN and the other sports networks can come up with a way for us to watch without cable/satellite. A la carte is a non-starter, and so is paying $50 a month for each channel, if offered online. That's about what it would require to keep revenue at the level where they can pay all those ridiculous rights fees that the leagues/conferences extort from them.

Will there come a point at which all the networks will dig in and demand that the rights fees come down, way down? And what would the leagues' and conferences' response be? Would they give in? Would they sic their legal eagles on ESPN, NBCSN, Fox Sports and the like and trump up a collusion case against them? Yes, there are millions of sports fans who want to see these games. Yes, the rights fees keep climbing while conventional TV viewing keeps declining. So when do ESPN and the other sports networks draw a line in the sand?

 

[TheBigA]

So when do ESPN and the other sports networks draw a line in the sand?

The difficult part for ESPN is there are now several new players in the sports network business, and they're the same companies you see on OTA TV: NBC, CBS, and Fox. The playing field has been leveled and that's not good for ESPN. Meanwhile, some cable companies put the new sports nets on an optional tier, while ESPN remains standard. How long does that remain?

 

[MarcB]

When we switched over to DIRECTV we got a bare bones package and it does not include ESPN (or any other sports network). Truthfully I don't miss it. The only watched ESPN maybe half a dozen times a year. (Maybe 10 at the most) and it was only when my teams (Yankees baseball, Giants football) aired on the network. I only missed it the other day when I wanted to hear more about the death of Aaron Hernandez. I ended up downloading the Radio.Com app and listened to coverage on 98.5 The Sports Hub.

 

[PTBoardOp94]

Will there come a point at which all the networks will dig in and demand that the rights fees come down, way down? And what would the leagues' and conferences' response be?

It will be a long time before we find out. Most of ESPN's current content deals extend well into the 2020s. Who knows what the landscape will look like when ESPN's NFL contract is up in 2021 or its NBA contract is up in 2025?

Maybe Amazon's Thursday Night Football will go very well in 2017, and Amazon will bid for MNF?

 

[umfan]

I rarely watch anymore unless there is a MNF game worth seeing or another live sports event. I did enjoy several episodes of '30 for 30', but there isn't much else worth watching on ESPN.