ESPN Axes Long-Standing Reporters, But Not The Execs That Failed To See Cord Cutting Coming
from the forest-for-the-trees dept
For years ESPN has been the perfect personification of the cable and broadcast industry's almost-comic denial regarding cord cutting and market evolution. Long propped up by a system that forces consumers to buy massive bundles of largely-unwatched channels, ESPN has struggled with the rise of streaming alternatives and sleeker, "skinny" channel bundles. The sports network, which has lost 10 million viewers in just the last few years, has been trying to argue that these losses (which caused Disney stock to lose $22 billion in value in just two days at one point) are simply part of some kind of overblown, mass hallucination.
Surveys have shown that 56% of consumers would drop ESPN in a heartbeat if it meant a reduction in the $8 per subscriber the channel is believed to cost. But last year, ESPN exec John Skipper suggested that these departing customers weren't worth keeping anyway:
"People trading down to lighter cable packages. That impact hasn't leaked into ad revenue, nor has it leaked into ratings. The people who’ve traded down have tended to not be sports fans, and have tended to be older and less affluent. We still see people coming into pay TV. It remains the widest spread household service in the country after heat and electricity."
All is well! Nothing to see here! This narrative that cord cutters are somehow uneducated, too old, or otherwise not worth keeping (which isn't true) sits at the heart of cable and broadcast executive denial. And while execs like Skipper consistently insisted that everything was under control, former ESPN talent like Bill Simmons have noted that the cord cutting revolution came out of left field and surprised the hell out of the self-proclaimed worldwide leader in sports, which had spent years spending millions on SportsCenter set updates and licensing deals with nary a care in the world.
Instead of identifying market evolution and quickly adapting, ESPN did, instead, what any other legacy company would do. One, it began suing companies that tried to offer more innovative, disruptive cable TV packages that didn't include ESPN by default. Two, it began yelling at companies like Nielsen simply for showing company executives the truth: ESPN was losing subscribers at an alarming rate. In short, executives doubled down on bad behavior and denial, something fans had noticed for several years:
Pretty amazing sign on ESPN's College Gameday. pic.twitter.com/o2NfeMalSf
— Jason Abbruzzese (@JasonAbbruzzese) December 5, 2015
This week, some ESPN employees began paying the price. Including long-standing workhorse beat reporters like Ed Werder, who was among 100 on-air personalities and writers given pink slips this week.
After 17 years reporting on #NFL, I've been informed that I'm being laid off by ESPN effective immediately. I have no plans to retire
— Ed Werder (@EdwerderFA) April 26, 2017
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
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
In a memo posted to the ESPN website, Skipper proclaimed the staff reductions were necessary to "manage change" (something Skipper has shown himself incapable of doing while somehow remaining employed):
"A necessary component of managing change involves constantly evaluating how we best utilize all of our resources, and that sometimes involves difficult decisions...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. We will implement changes in our talent lineup this week. A limited number of other positions will also be affected and a handful of new jobs will be posted to fill various needs."
That's great and all, but purging your on-air talent won't magically make executives like Skipper less myopic and more flexible. After losing an estimated 10,000 viewers per day, ESPN recently stated it will finally offer a standalone streaming service. But that won't solve ESPN's woes either. I'm told many of Disney/ESPN's contracts with cable providers contain provisions that prohibit cable providers from offering channel bundles without ESPN -- unless ESPN offers a standalone streaming service. In other words, even if ESPN adapts, it opens the door to new skinny, sport-free bundles without ESPN -- accelerating subscriber declines.
None of this is pretty, and were I a betting man I'd wonder if Disney/ESPN doesn't get swallowed up completely by a company like Verizon sometime in the next year. At that point you'd have to wonder if ESPN execs, like John Skipper (you know, the ones actually responsible for the channel's monumental implosion) might actually face something vaguely-resembling accountability.
Thank you for reading this Techdirt post. With so many things competing for everyone’s attention these days, we really appreciate you giving us your time. We work hard every day to put quality content out there for our community.
Techdirt is one of the few remaining truly independent media outlets. We do not have a giant corporation behind us, and we rely heavily on our community to support us, in an age when advertisers are increasingly uninterested in sponsoring small, independent sites — especially a site like ours that is unwilling to pull punches in its reporting and analysis.
While other websites have resorted to paywalls, registration requirements, and increasingly annoying/intrusive advertising, we have always kept Techdirt open and available to anyone. But in order to continue doing so, we need your support. We offer a variety of ways for our readers to support us, from direct donations to special subscriptions and cool merchandise — and every little bit helps. Thank you.
–The Techdirt Team
Filed Under: business, cord cutting, predictions, sports
Companies: espn
Reader Comments
Subscribe: RSS
View by: Time | Thread
I'm sure that all of the staff they cut were the real problem in the company, not the fact they had to be let go to make sure the Exec's got their bonuses.
[ link to this | view in chronology ]
Re:
[ link to this | view in chronology ]
Down With ESPN
[ link to this | view in chronology ]
Re: Down With ESPN
[ link to this | view in chronology ]
Disney owns ESPN
[ link to this | view in chronology ]
Re: Disney owns ESPN
[ link to this | view in chronology ]
Firing all these overpaid sportscasters would be a relief to both ESPN's budget as well as sports fans.
[ link to this | view in chronology ]
Re:
[ link to this | view in chronology ]
Re: Re:
[ link to this | view in chronology ]
Re: Re: Re:
[ link to this | view in chronology ]
Re: Re: Re: Re:
[ link to this | view in chronology ]
ESPN's situation kind of parallels what happened to the music recording industry during the shift from CDs to MP3/music downloads.
I just wish the execs would get punished for the lack of foresight and adaption, not the little guys.
[ link to this | view in chronology ]
Re:
Oh, if only ESPN and all other forms of sports coverage could disappear from the face of the earth.
[ link to this | view in chronology ]
Re: Re:
[ link to this | view in chronology ]
[ link to this | view in chronology ]
Not a word about content....
[ link to this | view in chronology ]
[ link to this | view in chronology ]
Re:
While the rebels regroup in their hidden base, emperor trumpitine signs an executive order that all internet packages must now devote 50% bandwidth to ESPN effective throughout the galaxy.
[ link to this | view in chronology ]
Great Story
If someone is willing to drop the channel, they likely were not active viewers. If you are a sports fan and like the sports ESPN has, you are unlikely to want to drop them just like that. There are no real online services at this point to replace them. Of course, some might drop in favor of ESPN streaming, but you wouldn't call those cord cutters, just phase shifters.
So what the exec is saying is basically true. If non-viewers are "cutting" the cord, then yes, ESPN loses some subscription revenue (but not the full $8, as the cable company got a big chunk of it), but they are not losing on the ratings and the ad revenue as the same viewers remain.
There is no claim that people leaving are less intelligent - but he does clearly state that it leans towards older and less affluent. That doesn't mean unintelligent.
Now, for ESPN, their drop rate is lower than the overall cable drop rate, and with something like 88 million subscribers, they still are a powerhouse in what is a more and more diluted marketplace:
http://www.businessinsider.com/espn-subscribers-2017-3
ESPN is by far the most expensive channel per subscriber. That is certainly a negative. But their subscriber losses are in line and less severe than what cable is losing overall. The question is more to do with an overall shift away from cable towards streaming services.
ESPN seems to be facing up to that reality pretty well. Belt tightening seems to be a reasonable way to address a loss of income. Since on air talent is quite expensive, it seems a good place to go. Were there any other layoffs or unfilled posts cancelled this time around?
[ link to this | view in chronology ]
Response to: My_Name_Here on Apr 28th, 2017 @ 9:29am
[ link to this | view in chronology ]
Re: Response to: My_Name_Here on Apr 28th, 2017 @ 9:29am
[ link to this | view in chronology ]
Re: Re: Response to: My_Name_Here on Apr 28th, 2017 @ 9:29am
[ link to this | view in chronology ]
[ link to this | view in chronology ]
Re:
[ link to this | view in chronology ]
swallowed up completely by a company like Verizon
i haven't paid attn to espn for a good many years, so maybe i'm way behind the times. is espn completely passé these days? else why would verizon have an interest?
[ link to this | view in chronology ]
Re: swallowed by verizon
[ link to this | view in chronology ]
Not only cord-cutting....
http://nypost.com/2017/04/27/sportscenter-anchor-agrees-politics-are-hurting-espn/
[ link to this | view in chronology ]
Re: Not only cord-cutting....
[ link to this | view in chronology ]
tHIS IS THE BIGGEST...
as I only see 2-3 of them..
1. Pay for Sports..(I only want $1million per year)
2. Price per seat..(and scalpers)
3. Signing YOUR RIGHTS AWAY for any production or Broadcast of your image WORLD WIDE..shirts to dolls to golf CLUBS..
OTHERS make more money on your image then EVEN you get for Wages.
And once you add all this up, SOMEONE has to pay...
And ESPN and the cable/sat business plan to CHARGE EVERYONE, even if you DONT watch ESPN channels..
The estimate that 30-40% want to watch sports..I think is high..but if you charge all the cable/sat Users Along with that 30%..THATS allot of ill gained goods. As ESPN is getting paid for the 60% that DONT WATCH SPORTS..
So how do you make more money AFTER you ROB everyone else..START CUTTING CORNERS..
[ link to this | view in chronology ]
ESPN in Oz
[ link to this | view in chronology ]
Re: ESPN in Oz
[ link to this | view in chronology ]
If ESPN execs might actually face something vaguely-resembling accountability
[ link to this | view in chronology ]