Kolek planning to go pro
What you didn't readESPN is losing subscribers but OFFSET by higher per rate sub gains. These articles you are reading DO NOT call out ESPN revenues, instead these analysts are extrapolating how much money they think have shrunk do to subscriber declines. They are purely guessing and based on the per sub rate they are using, they are off the mark. No one said everyone at ESPN will be fine, there have been obvious cutbacks.They absolutely did overspend for rights, which by the way they have tied up until the early 2020's. With Fox and others clamoring for more rights, that will continue into the next decade as well. Guess how they'll monetize it? They'll charge even more for their contentESPN is profitable and will remain profitable.
Those SNL Kagan per rate fees are wrong....that's for starters. Thus, the math is wrong right from the get go.
What are the right numbers?
This is not the way it is being reported ....http://learnbonds.com/125254/walt-disney-co-dis-espn-suffers-life-threatening-subscriber-bleed/The average ESPN subscriber pays around $6 a channel per month. So the erosion of 7 million subscribers would have resulted in a loss of over $500 million in revenue per year since 2013. And that’s not even taking into account the advertising dollar lost. Moreover, the last two year’s decline in subscribers has also been hurting its sister networks. ESPN2 lost 7 million subscribers, ESPNNews and ESPN Classic 6 million, while ESPNU shed 4 million subscribers.The Implications for Cable Industry are DireFox Sports’ Clay Travis reckons that if we put together all those subscriber losses, the revenue picture looks grim. “ESPN is bringing in somewhere around $700 million less in subscriber revenue from these channels than it did in 2013,” he wrote earlier today.He goes on to add that these revenue losses may be “partially offset by the SEC Network, which ESPN reports is in 63 million homes,” but the broad trend is still alarming for the cable industry. “ESPN is making hundreds of millions of dollars less off its core business in 2015 than it was making in 2013.”
Just to put somethings in perspective, ESPN delivered $6.8billion in operating profit this last fiscal year. It is wildly profitable.ESPN by itself is valued at over $50 billion, about 40% of Disney's total valuation.
This.It's like McDonald's. Had a few quarters without the earnings growth it had been enjoying, and many panicked with cries of, "Nobody eats that unhealthy crap anymore!"But millions and millions and MILLIONS do eat that unhealthy crap. Despite its "struggles," MCD still made more money than the next 10 restaurant chains combined.The death of Mickey D's was greatly exaggerated. As is the death of ESPN -- and certainly of Disney.
I PM'd you Berg
Interesting analogy using Mickey D'sThis is a company that has fired multiple CEOs, revamped its menu over and over and has lagged all its competitors making it one of the worst restaurant stocks of the last decade. I'm sure Chicos bought it 14 cents off its low but throw a dart at any other restaurant stock and you would have done much better.Oh yes, and the suits and Mickey D's will also tell you they knew all this was coming and they are really smart. In fact, to prove they are so smart they will point to Chipolte and Smash Burger ... they were both started by frustrated execs at Mickey D's because the brilliant suits would not listen to them so they left and made other wildly rich.So if you're saying that ESPN is a bloated bureaucracy that cannot change and will watch its talent go make others rich as it shrinks to half its size as the industry remakes itself without them, I agree.Oh, and reports of Western Unions demise were also greatly exaggerated. They exist too ... which is why Mickey and ESPN will do.
Heisy, please don't use Jim Cramer as an "expert". One of my favorite all time clips is of John Stewart taking him down after the crash in '08. (Sorry I mentioned that - Everything really was Obama's fault.)Otherwise I agree with you here. ESPN is not going out of business - but - they also cannot continue to sustain the loss of subscribers like the last two years. At what point would someone as blind as Chicos acknowledge the problem? Does it have to go to 10 million subscribers before he does?
Fair enough point about Cramer. Kass likes him (as Kass writes for his website thestreet.com)
He is entertaining and fun to watch - but he had no clue about the Wall Street crash until after it happened.
if ESPN is falling, my bet is it's because people turned them on for their sports, not their politics. whenever you take sides, you are going to lose some people.
Oh yes, and the suits and Mickey D's will also tell you they knew all this was coming and they are really smart. In fact, to prove they are so smart they will point to Chipolte and Smash Burger ... they were both started by frustrated execs at Mickey D's because the brilliant suits would not listen to them so they left and made other wildly rich.