ESPN Layoffs

[smootness]

They also aren't even losing money yet.

They are making an adjustment in advance of what is coming.

They only need to start monetizing a la carte offerings or offering direct subscriptions and they will be fine.

They are absolutely losing money relative to where they were. They aren't in the red yet, if that's what you mean, but they are headed there.

This move is likely not to actually cut costs, as these salaries don't represent a meaningful sum to them and certainly don't help offset what they lose in talent and coverage. It is likely a move made for the purpose of optics for investors.

I'm not exactly sure how a la carte or direct subscriptions solves their problem. Subscribers already pay over $9/month for ESPN's channels. That is baked into the cost of the cable package. Because sports viewers are not the ones cutting the cord, they're still maxing out on the number of people who would willingly subscribe (they're actually likely still above that number, as people will continue cutting the cord). So they would have to charge significantly more per month than a service like Netflix to make more than they're currently making on subscribers. I don't see that as a viable model.

 

[Klesko]

Many reasons why they are suffering at this point.

- Overcharging for their channel, just look at Sling TV where adding ESPN alone is $15 a month. I recently switched to SlingTV and love it but refuse to pay $15 for a single channel.
- Political, they have become very political in the past 10 years or so. No matter where you stand if you side with one group then you are alienating the other group. In the US that is at least 40% of the population.

There are many more but these two stick out the most for me.

 

[UNCBlue012]

Many reasons why they are suffering at this point.

- Overcharging for their channel, just look at Sling TV where adding ESPN alone is $15 a month. I recently switched to SlingTV and love it but refuse to pay $15 for a single channel.
- Political, they have become very political in the past 10 years or so. No matter where you stand if you side with one group then you are alienating the other group. In the US that is at least 40% of the population.

There are many more but these two stick out the most for me.

That's funny you bring Sling TV up. I got the free trial last week -- love it -- and did the Roku express promotion. It's such a great deal for $20.

 

[clvclv]

Haven't watched ESPN in years - for SportsCenter anyway - only time the channel even interests me is to make noise on Sunday mornings for fantasy football (usually the actual fantasy show as opposed to NFL Countdown) and for Carolina basketball games when they're on.

Have to say I've been pretty disappointed in my limited attempt at cutting the cord though - ditched DirecTV for local cable and bought an unlocked Fire Stick to begin the process and see if I could live without cable too, and now have no access to the MLB Network. Quite sure I could just be missing a way to get it, but if I'm not, MLB has to be missing an extra revenue stream - I'd certainly pay $15/month (even during the offseason) for the Network before I'd ever pay for ESPN or the various movie channels.

 

[4maddux_cy's]

Cord cutting is really only a temporary solution to saving money. It may take 2-3 years but eventually these providers, who often are the primary internet providers as well will just start eliminating unlimited data for home internet use. This has already started in some markets. Eliminating unlimited data will then balance out the cost as people will then be so used to streaming tv and other programming that they will be paying more for internet than in the past.

 

[Southcack77]

Many reasons why they are suffering at this point.

- Overcharging for their channel, just look at Sling TV where adding ESPN alone is $15 a month. I recently switched to SlingTV and love it but refuse to pay $15 for a single channel.
- Political, they have become very political in the past 10 years or so. No matter where you stand if you side with one group then you are alienating the other group. In the US that is at least 40% of the population.

There are many more but these two stick out the most for me.

Without people that don't watch ESPN subsidizing the cost of providing the content, you are going to pay more for it. Going to have to get used to that one.

 

[Southcack77]

They are absolutely losing money relative to where they were. They aren't in the red yet, if that's what you mean, but they are headed there.

This move is likely not to actually cut costs, as these salaries don't represent a meaningful sum to them and certainly don't help offset what they lose in talent and coverage. It is likely a move made for the purpose of optics for investors.

I'm not exactly sure how a la carte or direct subscriptions solves their problem. Subscribers already pay over $9/month for ESPN's channels. That is baked into the cost of the cable package. Because sports viewers are not the ones cutting the cord, they're still maxing out on the number of people who would willingly subscribe (they're actually likely still above that number, as people will continue cutting the cord). So they would have to charge significantly more per month than a service like Netflix to make more than they're currently making on subscribers. I don't see that as a viable model.

They are not losing money. That's all I said.

I think adult people who aren't poor will pay what it takes to keep access to live sports.

In many cases that will probably work out to going back to cable.

ESPN should have even more leverage with cable companies for rights fees.

If sports fans have to start bearing the real cost of their habits, I think they will adjust. Or maybe they won't be sports fans anymore.

 

[Klesko]

Cord cutting is really only a temporary solution to saving money. It may take 2-3 years but eventually these providers, who often are the primary internet providers as well will just start eliminating unlimited data for home internet use. This has already started in some markets. Eliminating unlimited data will then balance out the cost as people will then be so used to streaming tv and other programming that they will be paying more for internet than in the past.

I think the cat is out of the bag at this point and there will be no going back. Yes there might be bumps but in 10 years cable/satellite companies will no longer be content providers and will just be the utility on how we get to the content providers.

They will fight by doing things as you mention but they will lose.

 

[smootness]

They are not losing money. That's all I said.

I think adult people who aren't poor will pay what it takes to keep access to live sports.

In many cases that will probably work out to going back to cable.

ESPN should have even more leverage with cable companies for rights fees.

If sports fans have to start bearing the real cost of their habits, I think they will adjust. Or maybe they won't be sports fans anymore.

Sports fans are already bearing the cost of their habits. The problem is that non-sports fans have been bearing that same cost. They are refusing to do that anymore and are cutting the cord. That is where revenues are drying up.

The rights fees are already under contract. ESPN may try to re-negotiate but there's nothing that says that must happen. So even if they retain sports fans, the loss of non-sports fans will mean their revenues eventually sink below their expenses due to their current rights fee contracts.

Getting sports fans to pay significantly more than they would for a service like Netflix solely for ESPN channels will work with some, but it certainly won't work with all. Which means having to jack up the prices even further, which means even further subscriber losses, etc.

Their viability as a company going forward likely hinges on their ability to re-negotiate those rights fees and get costs well below where they are now. That also means player contracts are likely headed south. It's going to be interesting. People have called sports fees and salaries a bubble for a while now, and they may be right. If that bubble bursts, it's not going to be pretty for anyone.

 

[Southcack77]

Sports fans are already bearing the cost of their habits. The problem is that non-sports fans have been bearing that same cost. They are refusing to do that anymore and are cutting the cord. That is where revenues are drying up.

The rights fees are already under contract. ESPN may try to re-negotiate but there's nothing that says that must happen. So even if they retain sports fans, the loss of non-sports fans will mean their revenues eventually sink below their expenses due to their current rights fee contracts.

Getting sports fans to pay significantly more than they would for a service like Netflix solely for ESPN channels will work with some, but it certainly won't work with all. Which means having to jack up the prices even further, which means even further subscriber losses, etc.

Their viability as a company going forward likely hinges on their ability to re-negotiate those rights fees and get costs well below where they are now. That also means player contracts are likely headed south. It's going to be interesting. People have called sports fees and salaries a bubble for a while now, and they may be right. If that bubble bursts, it's not going to be pretty for anyone.

There are no issues with the viability of their company. They will be the ones to turn out the light if anything.

 

[smootness]

There are no issues with the viability of their company. They will be the ones to turn out the light if anything.

We'll just have to see. Have you actually looked at their current revenues and expenses? It's not looking great. And again, those contracts are signed and in place. They can't just refuse to pay them.

 

[depley]

I used to watch ESPN Sports Center at noon, but it has become unwatchable since Cari Champion took over as co-host. She is NOT a sports reporter, she is a bandwagon fan of anything black. They stopped doing top 10 in favor of the stupid as heck top 5 as picked by the co-hosts, which have little to do with anything. I guess this is the sort of "personality" that ESPN is harking about. Oh yeah and I hate hate hate the Cari Champion interviews with all these west coast actors and musicians that have nothing to do with sports.

 

[smootness]

She is NOT a sports reporter, she is a bandwagon fan of anything black.

Uh...

 

[ESP47]

People are tired of their crappy sports reporting and left wing agenda.

Sportscenter used to be about highlights with anchors that made them exciting and funny. After the highlights, they would show us a box score with a bunch of stats from the game. After that, they would move on to the next highlight until they captured every game from that day.

These days, if you aren't one of their favorite big market teams, Sportscenter shows you about 10 seconds of highlights, probably featuring their favorite team for 8 of the 10 seconds, regardless of whether they won or not. Then they show you the stat lines from 1 or 2 players from that game. Then they cut to two guys arguing about the game with opposite stances even though you can tell the one guy doesn't even believe what he's saying, he just has to say it to give us the picture that they're actually disagreeing. Then they cut to a mini documentary about a kid with cancer. After that, they push the agenda that any sort of contact in sports is bad for your health, therefore all the rules pussifying the state of sports today are awesome. Then they give us a story on race or domestic abuse and tell us how we need to feel about it, otherwise we're wrong. Then they cut to a couple more highlights in a "by the way, this happened, but whatever" fashion and repeat the whole thing over again. After it's all through, you realize that they didn't even end up showing any of the games you wanted to see the highlights from because they were too busy cramming their agenda in your face.