ESPN, which is supposed to be a sports network but sometimes gets confused and goes political, is reportedly having to cut $80,000,000 in staff salaries between now and Christmas, with an estimated number of 60 to 100 employees to be let go.
Over the last 6 years, the network has incurred a $1 billion dollar shortfall in their budget on the whole, as well as having lost well over 13,000,000 subscribers during the same timeframe.
Just this last April, 100 employees were let go from the wayward sports network and nearly 300 total were cut in 2015.
One has to wonder if this is due to their making it a point to get involved in politics on a network that should be about the sports or if they’re creating political commentary in a misguided attempt to save their numbers.
Look, ESPN is not going anywhere. It’s still by far the largest, most successful sports cable network, dwarfing upstart competitors such as Fox Sports’ FS1. Its world-class journalists such as Don Van Natta Jr. and Seth Wickersham continue to drive the news cycle with their reporting on the NFL civil war between commissioner Roger Goodell and Cowboys owner Jerry Jones.
Looking to connect with younger consumers, ESPN just launched “SportsCenter” on Snapchat, with Katie Nolan, Elle Duncan and Cassidy Hubbarth. It also re-signed successful “SportsCenter” host Scott Van Pelt, whose late night show is viewed as a template for more personality focused “SportsCenters.” ESPN is far from alone in laying off staffers in the struggling media business.
But numbers don’t lie.
ESPN lost a whopping $1 billion in affiliate revenue after dropping 13 million subscribers in just six years, according to the SportsBusiness Journal. Sports insiders agree ESPN overpaid for the NFL’s “Monday Night Football” ($1.9 billion annually) and the NBA ($1.4 billion a year). During 2016, ESPN’s prime-time viewership fell 19 percent, according to the SBJ. Rather than driving Disney’s profits, ESPN has been dragging them down, spooking Wall Street analysts.
Meanwhile, ESPN management threw money at many anchors, analysts and reporters whose contracts were up in recent years to stop them from jumping to FS1 and other competitors. Some lost those high-paid TV gigs this spring. But ESPN is still on the hook to pay their full salaries until they get a new job elsewhere. Not many have over the past six months. Given the length of some of these expensive deals, not many will in the future, according to Awful Announcing.
“ESPN is dealing with three simple math problems. They have fewer subscribers than they planned for. They have higher costs than they planned for. They lower ratings than they hoped for,” said one source.