As the names of the roughly 300 laid-off ESPN employees leaked though the sports industry at the end of last week, many longtime executives reacted with a sense of disbelief.
These weren’t household names like Bill Simmons or Keith Olbermann, who left earlier in the year. In fact, none of ESPN’s on-air talent were part of the cuts. Rather, they were friends and colleagues. There were the producers who spent their entire career on the ESPN campus and executives who are raising families in Bristol, Conn. — hardly a hotbed for sports media.
The cuts sent shock waves through the sports and media industries, incredulous that a company seemingly rife with cash would have to lay off so many good people. This was not a case of cutting fat, ESPN insiders say. Many capable executives and talented producers were shown the door last week.
The moves continued a troubled period for the sports media giant that started when Disney CEO Bob Iger told CNBC that “the business model may face some challenges over the next few years.” His remarks led to a sell-off of media stocks during the summer.
SportsBusiness Journal talked to more than a dozen senior executives — both inside and outside of Bristol — about how ESPN got to this point. All seemed surprised at the severity of last week’s cuts. None wanted to speak on the record because of the sensitivities associated with the layoffs.
All the contacts pointed to a combination of skyrocketing rights fees and deep distribution cuts that put ESPN in the position where it had to shed about 4 percent of the company’s workforce.
“The cost of goods is going up and sales are going down,” one longtime industry executive observed. “That’s not a good trend.”
ESPN remains one of the most powerful entities in sports. It’s still in 92 million homes and makes a whopping $6.50 per subscriber per month. And it has long-term deals in place with most of the country’s biggest sports leagues. ESPN President John Skipper spent Wednesday afternoon walking ESPN’s campus, projecting an air of confidence during one of the company’s darkest days.
“These changes are part of a broad strategy to ensure we’re in position to make the most of new opportunities to build the future of ESPN,” Skipper wrote in a memo that was distributed on the company’s website. “I realize this process will be difficult — for everyone — but we believe the steps we are taking will ultimately create important competitive advantages for our business over the long term.”
But last week’s layoffs offered the clearest sign yet that all is not well for the Worldwide Leader in Sports.
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Poll Data Shows Tepid Response To Tom Brady Joining FOX
“A recent Harris Poll conducted on behalf of Front Office Sports showed that 1 in 3 Americans are more likely to watch a game with Brady on the microphone.”
FOX Sports reportedly signed Tom Brady to a 10-year deal worth $375 million to make the seven-time Super Bowl champion the new lead analyst for its top NFL broadcast once his playing career is over.
A recent Harris Poll conducted on behalf of Front Office Sports showed that 1 in 3 Americans are more likely to watch a game with Brady on the microphone.
The poll said 2 in 5 NFL fans have a better opinion of FOX Sports following the deal, with 41% of NFL fans being at least somewhat more likely to watch a game with Brady as an analyst.
Data shows one-third of NFL fans think the deal Brady reportedly agreed to is worth about the same as its reported value.
That reaction could probably be described as “tepid”. That may be exactly what FOX expects and maybe all it wants.
Last week, Domonique Foxworth of ESPN suggested that the paycheck is less about what the network thinks Tom Brady means to viewers and more about showing the NFL that the network values its product.
FOX Not Interested In Joining Streaming Sports Wars
“All this fight that’s going on, sort of gladiatorial kind of bloodshed, is really for that last position, right, in the three to four services that people will take?”
The CEO of FOX doesn’t plan on forking over billions of dollars to be people’s last choice for paid streaming services.
Lachlan Murdoch said at a time when more than 80% of American homes already have some kind of paid streaming service, it’s not worthwhile to jump on that train.
Amazon, Netflix and Disney+ typically account for the average streaming presence in a household.
“All this fight that’s going on, sort of gladiatorial kind of bloodshed, is really for that last position, right, in the three to four services that people will take,” Murdoch said at a tech conference earlier this year. “And so the billions of dollars that’s being spent by multiple aspirants is all for that last position. And so we are extraordinarily — I want to say that — we’re happy to be sort of sitting on the sidelines.”
Murdoch told Benjamin Swinburne that when it comes to the NFL, FOX’s media rights are the same as CBS, NBC and ESPN. The main focus for the company remains on keeping games on TV.
“We don’t believe it helps us to put those rights under a streaming service or free on over-the-air. We think it’s very important that those rights remain exclusive to the broadcast environment,” Murdoch said.
FOX does stream games through its app, but it is only the games it is also carrying on its broadcast network or FS1.
NBA Draft To Get Simulcast From ESPN & ABC
“This follows the simulcast model ESPN and ABC have employed for several years with the NFL Draft.”
ESPN is set for the 2022 NBA Draft coming up on June 23 at 8 p.m. from the Barclays Center in Brooklyn. The network announced Wednesday the crews that will handle coverage on both ESPN and ABC.
ABC will broadcast the first round in primetime. Kevin Negandhi will host and will be joined by Stephen A. Smith, Chiney Ogwumike and Jalen Rose. Monica McNutt will be reporting and interviewing draftees.
This follows the simulcast model ESPN and ABC have employed for several years with the NFL Draft.
Malika Andrews will host both rounds for ESPN. Jay Bilas, Kendrick Perkins and Adrian Wojnarowski will share the set. Analysts Bobby Marks and Mike Schmitz will contribute.
“We’re thrilled that Malika Andrews will host this year’s ESPN presentation as she brings her well-documented, widespread skillset to our main set,” said David Roberts, head of NBA and Studio Production for ESPN. “The event will showcase the scope and depth of our NBA and college basketball talent roster with accomplished journalists and high-profile personalities across ESPN, ABC and ESPN Radio.”
ESPN will air a pre-draft red carpet show hosted by Cassidy Hubbarth from 5-6 p.m. Perkins and Richard Jefferson will also make appearances.