ESPN, a decidedly old-guard institution and barely-hanging-in-there holdover from the early days of cable just dropped pink slips on at least 100 individuals in its front-line talent pool. More to come.
The Mouse’s once venerable sports and media juggernaut is now showing its age more than Carrot Top after missing a BOTOX sesh. The Network, which has struggled mightily over the last decade to capture new viewers on old formats (namely basic cable), has failed to make up that lost revenue even with a robust internet presence.
As a result, shares of the Walt Disney Co. (DIS) dipped 2% in early February after the company reported a mixed bag from its media group for the final quarter of 2016. Congruously, ESPN’s revenue in that same Q4 time frame fell 2% to around $6 billion. The parent company blamed the moving of the College Football Playoff games to Q1 and cutbacks on the number of hours it ran erstwhile ratings-grabber SportsCenter as the culprit for the sag.
But that’s only a small part of the story — and Disney knows it.
ESPN, which boasted 100 million cable subscribers in 2012, is now in the 85-million-and-shrinking range. The attrition is likely to continue at a more rapid rate. Late last year, media consultants Magid Advisors reported almost 6 percent of respondents to a cable/satellite survey age 18 to 64 years old said they were “very likely” to discontinue their cable-TV or satellite subscription this year. As the Millennial dollar stays far away from trap institutions like pay cable, new car buying, suburban jumbo mortgages and beer that’s not locally brewed—that number of those abandoning traditional viewing will increase, exponentially.
Last fall, The Network admitted it had lost seven million subscribers since 2014. If there is any single-month example of how things are going for ESPN, it’s November 2016. During the heart of college football season and the NFL, The Network’s bread, butter, potato and side salad, it lost 621,000 subscribers. That’s not only the most it had ever lost in a month, but prior to 2012, that number would account for multiple years (a decade) of attrition.
Yes, some viewers have migrated online. ESPN still touts 22 million daily users and a 34 percent share of the sports category as recently as the end of last year. This included more than 1 billion minutes of streaming on WatchESPN. But fractions of a penny per viewer hasn’t translated into revenue enough to make up for losses in TV viewership. As a result, Disney has already cut more than $100 million from ESPN’s budget for the remainder of 2017 and an additional $250 million worth of talking heads are expected to roll within the next 18 months.
That roll started in earnest this week.
In the work-email-you’re-afraid-to-open-as-you-watch-everyone-around-you-heave-a-huge-sigh-and-walk-out-at-10:48 a.m.-to-go-get-fucking-hammered category, network president John Skipper announced the first big shakeup Wednesday morning, saying “a necessary component of managing change involves constantly evaluating how we best utilize all of our resources, and that sometimes involves difficult decisions.” This caused everyone at once to IM each other with some version of Then how bout you give up some of your $5 million/year salary you fucking dick.
Skipper continued with omnipotent-sounding CEO bullshit about strategy and digital and being dynamic and versatility and fucking-A early ‘90s management 101 jargon: “Our content strategy—primarily illustrated in recent months by melding distinct, personality-driven SportsCenter TV editions and digital-only efforts with our biggest sub-brand—still needs to go further, faster …and as always, must be efficient and nimble. Dynamic change demands an increased focus on versatility and value, and as a result, we have been engaged in the challenging process of determining the talent—anchors, analysts, reporters, writers and those who handle play-by-play—necessary to meet those demands.”
Yeah. If you’re Skipper don’t accept a drink from anyone at the Christmas party …and definitely pick out a bathroom buddy for the next few months at work.
An estimated 100 of the network’s top 1,000 talking heads and writers are a part of the initial shake-up.
The following are some of the folks who are now expats of a strip mined media industry. People who used to have untold expertise and stable jobs but are now dumped into the gig economy while Disney brass looks to pad profits so a PE firm or even Apple can buy them out. Those about to be cut loose from Bristol will probably never work in their chosen industry again unless you count their blogs that garner dozens of clicks/week (and I don’t mean that as an insult).
They are: NFL reporter Ed Werder is the marquee name in the first round of layoffs. He is the ESPN equivalent of that story your grandpa once told you about having to sell his Cadillac because his Hi-Fi business went under. People just moved on from a sure thing.
Brett McMurphy, a college football reporter, Jean-Jacques Taylor, a big star football insider in West Texas, Jim Bowden, former manager and MLB analyst, college football guy/radio host Danny Kanell, John Buccigross, an anchor for The Network since 1996, Super Bowl-winning QB Trent Dilfer, NFL guy Paul Kuharsky, baseball writer extraordinaire Jason Stark, NHL stalwarts Pierre LeBrun, Scott Burnside and Joe McDonald, gone, gone and gone, college basketball writer Eamonn Brennan and Big Ten specialists Austin Ward, Jesse Temple and Brian Bennett, joined by college recruiting experts Jeremy Crabtree and Derek Tyson in the bread line along with ESPNU host Brendan Fitzgerald. Lastly, college basketball reporter Dana O’Neill is gonna have to come up with another Twitter handle — stat:
Add me to the list. Just got the 'call.' I've been informed my contract will not be renewed at ESPN.
— Dana O'Neil (@DanaONeilWriter) April 26, 2017
Other tweets from the recently dumped:
…Wonder what else has ended for Kanell and his wife …in three minutes? (Sorry…we’ve all been there.)
Poured my heart and soul into ESPN for last 8 years. Moved my wife and 3 kids to CT to go "all in" 5 years ago. Bummed it ended in 3 minutes
— Danny Kanell (@dannykanell) April 26, 2017
I’ve seen Dilfer around Incline Village a fair bit (hell, it’s his profile pic). If he stays in his lane doesn’t split twos — or frequent the Paddle Wheel — he should be OK in retirement.
Laid off by ESPN today.Although sad cause I loved my job, mostly filled w/gratitude & appreciation for the 9 years #GreatFriendsAndTeammates
— Trent Dilfer (@DilfersDime) April 26, 2017
Stark’s status just makes me, and his 500k followers, sad.
For 17 yrs I've had a dream job covering baseball for ESPN. Today is my last day. Thanks to all the great people at ESPN, MLB & all of you!
— Jayson Stark (@jaysonst) April 26, 2017
Others who should be updating their LinkedIns today also include Baseball Tonight host and MLB play-by-play announcer Karl Ravech and network veteran Hannah Storm who will see their roles “significantly reduced.”
Prior to this week, ESPN had a recent history of quiet(ish) layoffs or folks just simply moving on. In 2015, The Network parted ways with on-air and web talent Keith Olbermann, terrestrial blowhard Colin Cowherd and Grantland founder Bill Simmons — all three in onset middle age with bloated contracts and shrinking audiences.
Later that year, ESPN laid off more than 300 back-of-the-house employees, or about 4% of its workforce, to balance out the balance sheet. OG anchor/founding father Chris Berman’s retirement earlier this year was something of a non-event. The man who navigated the fledgling network through uncharted waters of roller derby and ping pong to becoming king of a new cable media medium while wearing a chartreuse Century 21 junior agent blazer was quietly exited at 61. Boomer was ready and so was what was left of his audience.
ESPN is quickly going the way of the local sportscast and the metro sports section it helped demolish. Buoyed by personalities like Berman, the all-knowing prep school bully smarm that defined The Network and gave a voice in sports and pop culture to the baby boomers has grown cold. Unless one is held captive in a hotel lobby bar at the wrinkled-oxford and saggy-socked end of a 16-hour sales conference day, looking bleary-eyed through a last-call pint of Goose Island foam, there is no reason to tune in to see what the talking heads of ESPN have to say.
The Network’s problems go beyond the dearth of a reliable revenue stream to compensate for cable’s slow death. A slew of overpriced contracts is likely the multi-billion-dollar elephant in the room.
ESPN’s monumental contractual obligation to the NFL bloats in time to revelations that professional football is not only bad for you, me and all the players, but boring as hell for the next-gen viewer.
In 2011, at the sport’s height of popularity, ESPN paid $15.2 billion to renew its contract for Monday Night Football through 2021. Last season, MNF ratings took a huge shit, falling off 24 percent from 2015, which was only compounded atop the 9 percent they fell off from 2014.
This year, some analysts predict yet another 30 percent drop.
The slump in prime time ratings for the once-venerable, highest-rated weekly show on cable is due to both an increase in competition and a decrease of intrigue. Be it because of slow play, an interminable number commercials/pauses, a revolt against concussions or too many binge watchable seasons of Black Mirror, the NFL’s TV ratings dropped a cumulative 14 percent in 2016.
Along with the Monday Night Football gaffe, ESPN also spent too much for college football, paying $2.25 billion to broadcast SEC games. $3.6 billion for the ACC, $1.5 billion for Pac-12 action that nobody watches east of Denver along with a whopping $5.6 billion for the College Football Playoffs that no one this side of Tuscaloosa gives a fuck about; tennis, almost $500 million on Wimbledon and $770 million for the U.S. Open; MLB, $5.6 billion to broadcast baseball …and to top it off, $12.6 billion on the NBA.
None of these bets have paid off and cumulatively that represents $46 billion of contractual commitments to amateur and professional sports leagues, conferences and tournaments that haven’t been close to the ratings behemoths they were in the early ‘10s when most of those deals were codified.
For now, ESPN is still a profitable arm of The Mouse. But they are on notice and the cuts are nowhere near close to being done. It sucks to think that Hannah Storm may someday soon be your Uber driver. Then again, it might be a nice change to chit chat with someone who’s actually checked your wiki page and tweets before she starts making small talk.