ESPN Layoffs

[tachyonbb]

ESPN lost 15,000 subscribers a day in October. A loss of 458,000 subscribers. Amazingly this is not their worst month as they lost more than 600,000 in one month is 2016.

 

[Lee Matthews]

What the reason but just losses.

People cable cutting and ESPN being tied to cable or something?

 

[bladiator]

Someone earlier was mentioning how other outlets are picking up the people that are dropping ESPN. I don't understand how they are getting the followers. For example, Colin Cowherd left ESPN and went with FOX Sports. Besides his hardcore listeners, who is now tuning into him on FOX? I personally don't "watch" sports talk shows ... I get everything I consume through radio sports talk. So when he left ESPN, I stopped listening, because he was on the local ESPN radio station.

That was a bit of a tangent, but I guess my question is -- if ESPN is dying because there are so many choices for sports talk and the like, then how is a place like FOX Sports PICKING UP talent (errr, "talent") like Cowherd and making it profitable? That seems like the opposite direction that the field is going.

 

[tjkraz]

That was a bit of a tangent, but I guess my question is -- if ESPN is dying because there are so many choices for sports talk and the like, then how is a place like FOX Sports PICKING UP talent (errr, "talent") like Cowherd and making it profitable? That seems like the opposite direction that the field is going.

ESPN's financial troubles stem more from the expensive, long-term contracts they're stuck with. NBA, MLB, NFL, college sports...they're paying billions for those broadcast agreements with some running another 8+ years. If viewers keep dropping ESPN at current pace, the financial picture is going to look pretty bad in a few years. Right now they're still profitable--though not AS profitable as they once were. Unless the cord cutting trend reverses or ESPN's subscription service takes off, they'll be losing money before those league contracts are up.

As for Fox, the division president who was bringing in all of the high-priced on-air talent was fired back in the summer over some sort of harassment claims. Their current model was his vision. Whether or not it proves viable remains to be seen. But those flagship Fox networks (FS1, FS2) aren't handcuffed by paying $2 billion per year to NFL and $1B+ to NBA, and when you start with zero viewership you can only go up.

Even as a sports fan, I'm not sure where these networks are headed. The days of watching SportsCenter for highlights are all but gone. Everyone with a tablet or smartphone--including elementary school students--have instant access to highlights and commentary. Many people claim that ESPN's supposed political leanings are a further turn off. I'm not sure that these talking head shows are the answer either. There was a Twitter account that seemed to take great pride in trolling the dismal ratings for Skip Bayless' show--one of the sports personalities who Fox poached from ESPN. I'm doing this from memory but supposedly Bayless draws something like 40,000 viewers on a typical day with a 0.0 rating in most major markets. He's reportedly getting $5.5 million per year from Fox.

 

[tachyonbb]

ESPN is losing 6 million subscribers a year. Average ESPN charge to the cable TV operators is $8.00 a month (ESPN, ESPN2, ESPNU) per subscriber.
That is a loss of $576,000,000 a year. Their current revenue is a little over $8 billion from subscriber fees. That is a loss of $1 billion every two years. Subscriber fees account for 70% of their revenue. They have doubled their subscription fee since 2010 but further increases will be much more difficult. ESPN was so popular that they could require cable companies to include it in their basic cable package. Cable companies are moving to more flexibility to stop the cable cutting bleeding. A DigitalSmith survey stated that only 36% of current cable subscribers would subscribe to ESPN is it was not bundled with their basic package.

Papa Johns announced today that they are dropping their NFL commercials due to the backlash over the protests. That will impact all five carriers of NFL (FOX, ESPN, CBS, NFLNetwork, NBC). Other advertisers are also withdrawing from both national and local markets.

Fox sports grew by 500,000 subscribers last month. Their average charge per subscriber is $1.30.

ESPN is currently 30% of Disney revenues. If projections are right their revenue will decrease by at least 500 million a year for a couple more years then they will level off. A few actually predict the spiral of diminished revenue will increase. Somewhere that money has to be made up elsewhere in the business.

 

[kandb]

I don’t think any sports network reports specifically sports news and scores. They all have opinionated type talk shows.

Maybe so, but they should keep politics out of it. People watch sports as an escape, they don't want to hear someone's own political views. We all have our own, and what gives them more merit than anyone else?

 

[kandb]

ESPN is losing 6 million subscribers a year. Average ESPN charge to the cable TV operators is $8.00 a month (ESPN, ESPN2, ESPNU) per subscriber.
That is a loss of $576,000,000 a year. Their current revenue is a little over $8 billion from subscriber fees. That is a loss of $1 billion every two years. Subscriber fees account for 70% of their revenue. They have doubled their subscription fee since 2010 but further increases will be much more difficult. ESPN was so popular that they could require cable companies to include it in their basic cable package. Cable companies are moving to more flexibility to stop the cable cutting bleeding. A DigitalSmith survey stated that only 36% of current cable subscribers would subscribe to ESPN is it was not bundled with their basic package.

Papa Johns announced today that they are dropping their NFL commercials due to the backlash over the protests. That will impact all five carriers of NFL (FOX, ESPN, CBS, NFLNetwork, NBC). Other advertisers are also withdrawing from both national and local markets.

Fox sports grew by 500,000 subscribers last month. Their average charge per subscriber is $1.30.

ESPN is currently 30% of Disney revenues. If projections are right their revenue will decrease by at least 500 million a year for a couple more years then they will level off. A few actually predict the spiral of diminished revenue will increase. Somewhere that money has to be made up elsewhere in the business.

Budweiser is also getting a lot of backlash from NFL viewers, rightly so.

 

[kandb]

We cancelled our cable. We only have Wi-Fi in our house and I pay $5/mo. for OOMA which is a phone landline. It is great to pay $50 a month (plus $10 for Netflix) instead of almost $200. No one in our house misses it and we are saving over $1500/year for cable. We never watched the shows anyway. Many series you can get out of the library also.

 

[lockedoutlogic]

What the reason but just losses.

People cable cutting and ESPN being tied to cable or something?

Yep...welcome to the United States, circa 1985

 

[lockedoutlogic]

Espns losses aren't about cloth and knees...

It's
1. Digital options not requiring cable
2. Exhorbinant fees to subscribers That are now being dumped for stream options
3. Lack of money in the average pocket forcing cancellation due to the frivolity of it and the rise of mobile devises that take the place of cable.

 

[tjkraz]

ESPN is losing 6 million subscribers a year.

Source? ESPN peaked at 100 million households in 2011. Now it’s down around 87 million. That’s 13 million lost subscribers in 6 years.

 

[lockedoutlogic]

Source? ESPN peaked at 100 million households in 2011. Now it’s down around 87 million. That’s 13 million lost subscribers in 6 years.

They actually had 111 from
What I remember seeing...

So that would make it 24 in 6 years or around 4 per year

 

[umichigan10]

Espns losses aren't about cloth and knees...

It's
1. Digital options not requiring cable
2. Exhorbinant fees to subscribers That are now being dumped for stream options
3. Lack of money in the average pocket forcing cancellation due to the frivolity of it and the rise of mobile devises that take the place of cable.

Cable was we know it will be dead in ten years. Companies like YouTube are jumping all over the idea of streaming live events, and platforms like Netflix and prime are making the concept of needing cable for daily entertainment extinct

 

[tjkraz]

They actually had 111 from
What I remember seeing...

So that would make it 24 in 6 years or around 4 per year

Pretty easy to google. I have not seen a figure above 100 mil and change.

 

[umichigan10]

Maybe so, but they should keep politics out of it. People watch sports as an escape, they don't want to hear someone's own political views. We all have our own, and what gives them more merit than anyone else?

I think espns issue is they try and hire opinionated people but then get mad when they actually express those opinions. Not necessarily political but look at their collaboration with barstool. Their relationship with Bill Simmons. They want to have edgy takes but not let those people say what they want.

 

[tjkraz]

Cable was we know it will be dead in ten years.

The delivery mechanism may change. The marketplace may shrink (fewer networks.) But there will still be many different networks/platforms, and there will be demand from people who want a variety of content bundled at an economical rate.

...and platforms like Netflix and prime are making the concept of needing cable for daily entertainment extinct

Not for live sports, though.

Netflix is a tough one to take-on in a quick forum post. The streaming service began as an aggregation of older content from dozens of networks. And they’re rapidly ditching that model, allowing contracts to expire (or having networks refuse to renew) at an alarming rate. Netflix’ commitment to original programming makes sense long-term, but it also makes them just another network.

In a few years when everyone from Disney to AMC to FX has its own standalone streaming products, people are going to start asking themselves if Stranger Things, Daredevil and Ozark are really worth $11 (or $12, or $15) per month when they could spend similar dollars to subscribe to a la carte services from 2 or 3 other networks.

And that’s not even taking into account Netflix’s financial position, which many have called into question given the rate at which they are burning through cash.

 

[lockedoutlogic]

Pretty easy to google. I have not seen a figure above 100 mil and change.

So upon further review...

They've lost 13 overall...but, that's accelerating rapidly...they lost 7000 per day in September - which is typically when they add their biggest numbers of the year...football re-ups...

So if they lost 280,000 in a typical + month...then their year end is gonna be awful...

Not as bad as 7,000,000 a year...but looking at getting that 3,000,000 range.

And when tech crashes...it goes down like a torpedoed ship. If espn drops to 75 mil subscribers...it will be crushed under its own weight. Nobody left to fire.

 

[tjkraz]

So upon further review...

They've lost 13 overall...but, that's accelerating rapidly...they lost 7000 per day in September - which is typically when they add their biggest numbers of the year...football re-ups...

So if they lost 280,000 in a typical + month...then their year end is gonna be awful...

Not as bad as 7,000,000 a year...but looking at getting that 3,000,000 range.

And when tech crashes...it goes down like a torpedoed ship. If espn drops to 75 mil subscribers...it will be crushed under its own weight. Nobody left to fire.

Standard Nielsen data doesn’t include the virtual MVPD streaming services like Sling, Playstation Vue and Directv Now. Sling claims to have over 2 million subscribers, although not all plans have ESPN. Directv Now is around 1mil with all having ESPN. Vue has been around long enough that it probably has 1 mil, all with ESPN. Newer services include Hulu TV and YouTube TV, both with ESPN in their packages. The raw data of subscriber losses by metered cable and satellite providers doesn’t tell the full story.

And from a revenue standpoint, Disney has still been successful in gaining rate increases. They recently reached a new deal with cable co Altice which represents about 3 million homes. Details aren’t available but it’s generally believed that Disney got some sort of increase. And contracts already in place have annual escalators. Disney isn’t benefitting from higher rates AND stable subscribers, but one is helping offset the other.

Nobody really knows when cord cutting will plateau. But it’s a given that there are tens of millions of people who want sports in their lives. When you “cut the cord”, you basically lose everything. Without a bundle, you aren’t getting NBA games on TNT, NCAA basketball on TBS and TruTV, MLB on FS1. Individual leagues have their on season passes, but those run $30-50 per month EACH for just 5-6 months of coverage. And that’s coverage with blackouts of local games and national broadcasts.

ESPN is criticized for the expensive pro sports contracts but the live sports ARE the network. ESPN is nothing without college bowl games, NBA 2-3 nights per week, Monday Night Football, etc. For the variety they provide—a dozen different channels including ACC network, Longhorn Network, etc.—I think $15 per month is a very obtainable fee for a standalone service marketed to cord cutters. They wont’ get 100 million people to buy in at that price, but the higher rates will again offset the lower audience.

Viewers aren’t paying for SportsCenter or the dozen different talking head shows. But they will pay to see college bowl games, Duke vs North Carolina basketball, the 20 times per year ESPN will show the Cavs, Warriors and Celtics, MNF, Yankees/Cubs/Red Sox and dozens of other contests with both regional and national appeal.

 

[lockedoutlogic]

Standard Nielsen data doesn’t include the virtual MVPD streaming services like Sling, Playstation Vue and Directv Now. Sling claims to have over 2 million subscribers, although not all plans have ESPN. Directv Now is around 1mil with all having ESPN. Vue has been around long enough that it probably has 1 mil, all with ESPN. Newer services include Hulu TV and YouTube TV, both with ESPN in their packages. The raw data of subscriber losses by metered cable and satellite providers doesn’t tell the full story.

And from a revenue standpoint, Disney has still been successful in gaining rate increases. They recently reached a new deal with cable co Altice which represents about 3 million homes. Details aren’t available but it’s generally believed that Disney got some sort of increase. And contracts already in place have annual escalators. Disney isn’t benefitting from higher rates AND stable subscribers, but one is helping offset the other.

Nobody really knows when cord cutting will plateau. But it’s a given that there are tens of millions of people who want sports in their lives. When you “cut the cord”, you basically lose everything. Without a bundle, you aren’t getting NBA games on TNT, NCAA basketball on TBS and TruTV, MLB on FS1. Individual leagues have their on season passes, but those run $30-50 per month EACH for just 5-6 months of coverage. And that’s coverage with blackouts of local games and national broadcasts.

ESPN is criticized for the expensive pro sports contracts but the live sports ARE the network. ESPN is nothing without college bowl games, NBA 2-3 nights per week, Monday Night Football, etc. For the variety they provide—a dozen different channels including ACC network, Longhorn Network, etc.—I think $15 per month is a very obtainable fee for a standalone service marketed to cord cutters. They wont’ get 100 million people to buy in at that price, but the higher rates will again offset the lower audience.

Viewers aren’t paying for SportsCenter or the dozen different talking head shows. But they will pay to see college bowl games, Duke vs North Carolina basketball, the 20 times per year ESPN will show the Cavs, Warriors and Celtics, MNF, Yankees/Cubs/Red Sox and dozens of other contests with both regional and national appeal.

I honestly don't know anyone over the age of 25 that would even think of the turning on espn except for a live game...

And if you're not an NBA or college fan...you don't have a lot of reason to do that.

It's the streaming direct services from the leagues that are really doing the damage...

$100 - whatever they "adjust" it to that month for cable or satellite...
...or the entire season for $120 ish?

There's no way to stem that...expecially as fans become less and less attached to the local market.

So I'm in the podunk market directly between New York and philly...small
Rural areas. (That's sarcasm...bout 20% of the country's population is within 100 miles)

Anyway...cablevision was in a dispute with espn a couple of years ago and nobody could be bothered...

But the YES network? Hold the farm...the call in lines were lit up.

The world is changing and espn trying to ram Lebrun James or Steph down our throats isn't gonna fix it.

 

[maltdizzy]

What the reason but just losses.

People cable cutting and ESPN being tied to cable or something?

Yes, cord cutting.

Thanks to Hulu, Netflix, piggybacked extra channels on digital over-the-air, etc., people don't need cable anymore. And Sling, Sony, Hulu, Youtube, DirectTV, and others all now over internet-delivered "slim packages" of many of the popular cable channels. Sports remains that biggest reason to have cable but is also the biggest factor in high cable costs. For nearly 20 years the game plan was to own as many channels on cable as you could (even if there wasn't enough content), then force cable companies to take the lousy channels with the ones viewers really wanted, and ESPN was Disney's main bargaining chip. But the lack of content on so many channels and the high costs have come back to haunt them.