Awful Announcing
ESPN will reportedly undergo “significant” layoffs in the coming months http://dlvr.it/NYL1n1 pic.twitter.com/IhTzZajEtf
In February, ESPN’s parent company Disney reported its first quarter earnings and they fell short of expectations. Much of the revenue shortfall came from its media networks and once again ESPN’s higher programming costs along with lower sales revenue were cited as the main reasons.
Richard Deitsch writes that “ESPN has been tasked with paring tens of millions of staff salary from its payroll, including staffers many viewers and readers will recognize,” meaning that these cuts will be on the talent side. In addition to the layoffs of existing on-air talent, there will be buyouts of some contracts. SI adds that the buyouts are rare so this is new territory for ESPN.
One major factor for ESPN’s lower revenue is the fact that since 2011 when the network was in 100 million homes, it has lost subscribers and is now available in 88.4 million homes.
This is no doubt a big hit for ESPN. Sports rights fees are not going down, but up. The bubble is not bursting and as it charges pay TV providers more than $7 per subscriber, ESPN sees that its traditional model of advertising revenue and subscriber fees is being challenged. Whether ESPN chooses to develop a direct-to-consumer product or stand pat will be anwered in the coming years.
http://www.outkickthecoverage.com/espn-profit-plummets-as-network-turns-left-020817
ESPN Profit Plummets As Network Turns Left
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