ESPN Layoffs

[rocket surgeon]

No, that's not how it works.
ESPN knows exactly what it's viewers are and are not watching, and when and how they are watching it. If they're investing in  commentary and outrageous personalities, as opposed to, say, highlights shows and Stump the Schwab (RIP), then it's because those are the things people are watching.

they do, do they?  well then what went wrong?

[GGGG]

i don't, but we are analyzing what they did do(the 3 highlighted things) and the outcome wasn't too good.

The outcome could have been worse.  Pakuni is spot on.  ESPN knows what people are watching.  They are having trouble with the economics of cord cutting, and since they charge the highest carriage fees, they are feeling the greatest impact.  Changing programming back to what it was isn't going to help that.

[rocket surgeon]

The outcome could have been worse.  Pakuni is spot on.  ESPN knows what people are watching.  They are having trouble with the economics of cord cutting, and since they charge the highest carriage fees, they are feeling the greatest impact.  Changing programming back to what it was isn't going to help that.

i'm not saying that changing the programming back is the answer either.  what i'm saying is, if they know what people want or are watching, then do it.  if they need to cut costs, cut fees charged, downsize, do it.  bottom line-the gurus who get paid to make the game winning decisions need to get it right or step aside.  if my company is floundering, i have some decisions to make

[Pakuni]

they do, do they?  well then what went wrong?

It's been stated and re-stated here about a dozen times.
Market forces largely outside ESPN's control are costing the network subscribers.

[brewcity77]

they do, do they?  well then what went wrong?

Times have changed. 5 years ago, cord cutting was rare, live sports were booming because they were seen as DVR proof, and people were both tuning in to reporters and clicking on content driven articles. Under that reality, spending on live event contacts and the type of talent they had made sense.

In the past 1-3 years, that has changed. There are more streaming options for sports, articles are more bait driven, and the highlight shows are losing appeal as YouTube and other online sources are able to provide high quality a la carte highlights.

ESPN is adjusting to the new reality, but you can't do it overnight when what made sense 2-3 years ago is completely different today.

[GGGG]

i'm not saying that changing the programming back is the answer either.  what i'm saying is, if they know what people want or are watching, then do it. 

They are.

if they need to cut costs, cut fees charged, downsize, do it.

They just did.

I'm not exactly sure what your point is.  Mine is that ESPN largely knows what they are doing, but are dealing with macro issues beyond their control.

You could have been the best horseshoe manufacturer in the world 120 years ago, but there was nothing you could do to change the marketplace.  That is what ESPN is dealing with.

[ChitownSpaceForRent]

Some people seem to forget the fundamental rule of statistics. Correlation does not imply causation.

[rocket surgeon]

Times have changed. 5 years ago, cord cutting was rare, live sports were booming because they were seen as DVR proof, and people were both tuning in to reporters and clicking on content driven articles. Under that reality, spending on live event contacts and the type of talent they had made sense.

In the past 1-3 years, that has changed. There are more streaming options for sports, articles are more bait driven, and the highlight shows are losing appeal as YouTube and other online sources are able to provide high quality a la carte highlights.

ESPN is adjusting to the new reality, but you can't do it overnight when what made sense 2-3 years ago is completely different today.

  i really wasn't trying to be wise acre, but was merely feeding off what was presented-your explanation makes sense-thanks.

     typically however, these large, successful companies have a better pulse for things; an ear to the ground if you will.  seems they didn't realize the ship was sinking.  better late than never i guess, but a lot of good people lost their jobs...suddenly 

[Jockey]

The outcome could have been worse.  Pakuni is spot on.  ESPN knows what people are watching.  They are having trouble with the economics of cord cutting, and since they charge the highest carriage fees, they are feeling the greatest impact.  Changing programming back to what it was isn't going to help that.

Ya mean people won't want to pay the high cost of cable if they ESPN turns back the clock 20 years?

You were pretty much spot-on in your comments.

I'm amazed people have a hard time understanding this. ESPN has been put in the same boat that record companies were in about 20 years ago. They knew change was coming, but that doesn't mean you aren't afraid to chop a couple branches off of the money tree in the yard.

ESPN has to offer a standalone product. That is the future. But they have contracts to worry about, not to mention that a stand-alone product could cause even more people to drop cable.

Eventually, in my opinion ESPN, Fox Sports, CBSSN, and possibly others will band together to offer a product for sports fans who don't want cable. They will fight having to do it for as long as possible, just as the record companies did. But cable will NEVER go back to the number of subscribers it had. There are tens of millions who want the convenience of just one bill per month for cable and internet, but they are dying out fast. the numbers prove that.

Instead, I pay five bills and save $95 every month from when I had Time Warner.

[MU82]

You do know that Tebow is treated 100% differently than liberal heroes Sam, Jenner or Kap by the talking heads on both ESPN TV and Radio?  He is/was mocked incessantly.  From First Take to Around the Horn to PTI to Lebatard to ESPNW's The Trifecta, Tebow is made fun of. 

I don't recall a single negative word from anyone at ESPN about Sam, Jenner or Kap.

Of the shows you mentioned above, the only one I ever watch (and even then only semi-regularly) is PTI. Kornheiser and Wilbon often talk about Tebow. Their general tone has been VERY respectful. They say he was one of the greatest college football players of recent times, they say he wasn't a good pro QB but should have gotten more time to prove himself, they say he is a fantastic TV analyst, and they say they doubt he is a good enough ballplayer to be a big-leaguer.

In all of that talk, they never mocked him. They have mocked some in the media's obsession with him, but that's very different. Indeed, it's what I did in my silly, sarcastic post.

So, given that you were 100% wrong about PTI's take on Tebow, it's easy to dismiss what you say as alternative facts.

I stick by the point of my post: Given his lack of accomplishment on the professional level, the amount of coverage for Tebow has been excessive. But I do "get" it. People are interested in Tebow, and ESPN (and others) give viewers what they want.

Otherwise, count me as one who believes that ESPN's supposed liberal bent probably has cost some viewers but not a statistically important number of them. Economic reasons pretty much always trump all others in these kinds of decisions.

[NWarsh]

They are.


They just did.

I'm not exactly sure what your point is.  Mine is that ESPN largely knows what they are doing, but are dealing with macro issues beyond their control.

You could have been the best horseshoe manufacturer in the world 120 years ago, but there was nothing you could do to change the marketplace.  That is what ESPN is dealing with.

While I agree that the political viewpoints of ESPN did not have a major impact on this decline, I would argue that mismanagement was more of a factor than you are letting on.  While yes market forces of cord cutters on the surface are causing this, it was the management decisions to accumulate high fixed costs and tying yourself to cable subscriptions at a price that is 5x that of any other station that is the real factor.  ESPN leadership made a decision to go all in on live sports content and forced cable companies to pass through an absurd cost structure to their clients to include their station.  This was all happening as new technology was coming out and being developed that were allowing a small amount of people to live without cable.  I am sure the leaders at ESPN knew about this developing technology and made the decision to completely ignore that segment and double down on the live sports, high fixed cost model.

To me this is more a situation of investing in HD DVD or Blu-Ray. ESPN went all in on the HD DVD solution and now are trying to make it right.

[GGGG]

While I agree that the political viewpoints of ESPN did not have a major impact on this decline, I would argue that mismanagement was more of a factor than you are letting on.  While yes market forces of cord cutters on the surface are causing this, it was the management decisions to accumulate high fixed costs and tying yourself to cable subscriptions at a price that is 5x that of any other station that is the real factor.  ESPN leadership made a decision to go all in on live sports content and forced cable companies to pass through an absurd cost structure to their clients to include their station.  This was all happening as new technology was coming out and being developed that were allowing a small amount of people to live without cable.  I am sure the leaders at ESPN knew about this developing technology and made the decision to completely ignore that segment and double down on the live sports, high fixed cost model.

To me this is more a situation of investing in HD DVD or Blu-Ray. ESPN went all in on the HD DVD solution and now are trying to make it right.

I would agree with you, but I don't necessarily think that the decision to purchase high fee rights deals can yet be considered a bad one.  I guess we will see moving forward.

[mu03eng]

I've been on vacation the last 9 days so haven't chimed in but did some reading and thinkin' on this ESPN issue and here are some scattered thoughts that resulted from thinkin' while drinkin':

ESPN has three issues that are all hitting at the same time that are combining to impact them negatively. Those issues are:
1. overpaying for live content (given change in consumption models)
2. over investing in infrastructure/talent (given change in non-live content people want)
3. "stick to sports" paradigm change (could also be called social awareness)

Item number 1 was probably predictable given inevitable change in technology and the fact that many people were concerned with a sports bubble as early as 5 years ago. However, by itself it was entirely survivable if not for items 2 and 3.

ESPN invested a ton of time and effort into upgraded facilities and production capability, specifically around SC at preciously the time the need for SC died. They doubled down on their non-live sports content model at the same time that their viewers went away from that model (for cultural and technology reasons). So basically they should have taken that money ($125mil on an SC set alone) and lit it on fire. They made their digital footprint an extension of their now outdated content model forcing them to re-invest there as well. It's a lot like Kodak not seeing the cell phone camera coming....picture taking has never been more popular but the way we "consume" picture taking changed drastically and they didn't see it coming.

Those two things were probably survivable in combination, but then you layer in the "stick to sports" problem and I'm not sure it is survivable. Culturally (especially in the key demographic of 40 and under) the general public is no longer willing to accept that sports is a thing all to itself that, that somehow it takes place in a vacuum in which the "real" world doesn't intrude. So ESPN can't ignore the shady behavior of athletes or institutions or things going on within society in general....they are all interrelated now. As a consequence they must move to a model of not only reporting on the "non-sports" content but must also opine on it. And therein lies the left/right arguments about ESPN content, ESPN must enter into the "real" world which these days has a left/right aspect to everything. As a result, those who want to "stick to sports" as an escape are pissed. Those who are on the left will be pissed about anything that's perceived as a right leaning view point and Those who are on the right will be pissed about anything that's perceived as a left leaning view point. Further, the content required to retain the key demographic is likely to be very different than what the non-key demographic folks want to see so it creates another fracture point.


Bottom line, there isn't any one thing that is killing ESPN and it's certainly not as simple as well it's a bunch of liberal people putting out liberal content that nobody wants to watch. I'm sure there are biases of all type in the content so there isn't any one that's killing the network.

I don't know if long term ESPN survives this....it's going to require a lot of long term strategic vision that ESPN hasn't demonstrated that they have to date.

[MUDPT]

Any students on here? Do any of you have a cable subscription? Just curious.

[NWarsh]

I would agree with you, but I don't necessarily think that the decision to purchase high fee rights deals can yet be considered a bad one.  I guess we will see moving forward.

True, overpaying for live sports might not be a bad one in the long term. However, when you add that cost structure to their revenue model, that is without a doubt a bad decision based on what was happening with new technology.  It showed no vision and a fixed mindset.  To mu03eng's point they can still make it out of this if the leadership can show some long term strategic vision, but I am skeptical the current group can deliver given they missed the current trend so badly.

[mu03eng]

Any students on here? Do any of you have a cable subscription? Just curious.

It would have to be off-campus students as I think anyone in the dorms/Hump get cable as part of their room and board.

[Newsdreams]

It would have to be off-campus students as I think anyone in the dorms/Hump get cable as part of their room and board.

If I could get a sports stream package I would cancel my Direct TV 95% of what I have it for is sports

[ChitownSpaceForRent]

Any students on here? Do any of you have a cable subscription? Just curious.

I didn't have a cable package my junior or senior year. Neither did any of my friends. If we wanted to go watch a big game, we would go to a bar, illegally stream it, or use our parents login to watch the events on our computer. If we wanted sports highlights, we we just go online. Was never a need to pay for a cable package.

[GGGG]

I've been on vacation the last 9 days so haven't chimed in but did some reading and thinkin' on this ESPN issue and here are some scattered thoughts that resulted from thinkin' while drinkin':

ESPN has three issues that are all hitting at the same time that are combining to impact them negatively. Those issues are:
1. overpaying for live content (given change in consumption models)
2. over investing in infrastructure/talent (given change in non-live content people want)
3. "stick to sports" paradigm change (could also be called social awareness)

Item number 1 was probably predictable given inevitable change in technology and the fact that many people were concerned with a sports bubble as early as 5 years ago. However, by itself it was entirely survivable if not for items 2 and 3.

ESPN invested a ton of time and effort into upgraded facilities and production capability, specifically around SC at preciously the time the need for SC died. They doubled down on their non-live sports content model at the same time that their viewers went away from that model (for cultural and technology reasons). So basically they should have taken that money ($125mil on an SC set alone) and lit it on fire. They made their digital footprint an extension of their now outdated content model forcing them to re-invest there as well. It's a lot like Kodak not seeing the cell phone camera coming....picture taking has never been more popular but the way we "consume" picture taking changed drastically and they didn't see it coming.

Those two things were probably survivable in combination, but then you layer in the "stick to sports" problem and I'm not sure it is survivable. Culturally (especially in the key demographic of 40 and under) the general public is no longer willing to accept that sports is a thing all to itself that, that somehow it takes place in a vacuum in which the "real" world doesn't intrude. So ESPN can't ignore the shady behavior of athletes or institutions or things going on within society in general....they are all interrelated now. As a consequence they must move to a model of not only reporting on the "non-sports" content but must also opine on it. And therein lies the left/right arguments about ESPN content, ESPN must enter into the "real" world which these days has a left/right aspect to everything. As a result, those who want to "stick to sports" as an escape are pissed. Those who are on the left will be pissed about anything that's perceived as a right leaning view point and Those who are on the right will be pissed about anything that's perceived as a left leaning view point. Further, the content required to retain the key demographic is likely to be very different than what the non-key demographic folks want to see so it creates another fracture point.


Bottom line, there isn't any one thing that is killing ESPN and it's certainly not as simple as well it's a bunch of liberal people putting out liberal content that nobody wants to watch. I'm sure there are biases of all type in the content so there isn't any one that's killing the network.

I don't know if long term ESPN survives this....it's going to require a lot of long term strategic vision that ESPN hasn't demonstrated that they have to date.

True, overpaying for live sports might not be a bad one in the long term. However, when you add that cost structure to their revenue model, that is without a doubt a bad decision based on what was happening with new technology.  It showed no vision and a fixed mindset.  To mu03eng's point they can still make it out of this if the leadership can show some long term strategic vision, but I am skeptical the current group can deliver given they missed the current trend so badly.

I'm down with both of these.  Well stated.

[jesmu84]

Are we all actually that shocked that people/organizations were trying to get as much as they could while they could - long term ramifications be damned? That's the American way

[mu03eng]

Are we all actually that shocked that people/organizations were trying to get as much as they could while they could - long term ramifications be damned? That's the American way

That wasn't the problem, the issue was they were trying to grab as much profit as possible while assuming things wouldn't change and pouring millions into capturing those future profits.

[GGGG]

https://www.theatlantic.com/business/archive/2017/05/espn-layoffs-future/524922/?utm_source=atlfb

[Tugg Speedman]

https://www.theatlantic.com/business/archive/2017/05/espn-layoffs-future/524922/?utm_source=atlfb

From the article ...

Right now, ESPN produces very little that anybody would want to watch the following week, or following year, aside from its 30 For 30 documentary series. Perhaps ESPN should be spending more on prestigious sports documentaries and dramas that attract new audiences who don’t need a 6 p.m. highlight show.

Exactly correct!

ESPN needs to produce stuff that people want to watch (like 30 for 30) and then keep it to themselves forcing one to go only to them to see it.

The answer is not more blah blah blah sports talk than anyone can get anywhere.  Or highlights that can be found in 10,000 places on the net.

The answer is original programming.  More "30 for 30" or E-60 style documentaries.  Maybe original series shows revolving around sports:

* Make a series around the beginning of the NFL when Curly Lambeau's Packers and George Halas Decatur Staleys were starting something called the NFL
* How about a "re-boot" or the TV series "White Shadow" with Ken Howard from the late 70s/early 80s.
* How about a dramatic movie about Al McGuire and MU in the 1970s!

More stuff like the Showtime series "a season with ...."

Is this stuff expensive?  Sure.  But consider this (also from the story) ...

ESPN spent $175 million on a state-of-the-art facility whose primary purpose was to update SportsCenter for the multi-screen world. But SportsCenter has faltered in a media environment where highlights and fast analysis are widely available around the internet.

I'm sure this was a "good idea at the time" but today, to have spent that much on repackaging the latest LeBron dunk seems like a disastrously expensive decision.

What I'm describing is MTV.  They realized, like 20+ years ago, that music videos were so widely available that they had an effective value of zero for them.  So they decided to create original programming for people that like to watch music videos, and kept it for themselves.  HBO, Netflix and Hulu also realized that streaming old movies that can be found lots of places was also a low value business.  So, they are creating their own original content.

Likewise, ESPN has to realize that everything they do that is not live sports has an effective value of zero.  That is the majority of their programming day.  So they need to create original programming for people that like live sports, talk and highlights so they will want to come to their network and watch it.  And, can only get it on their network.

It is surprising that ESPN has not already done this.  They have been around from 37 years, have they ever produced a sports themed dramatic series or movie?

[Juan Anderson's Mixtape]

ESPN did have Playmakers until the NFL put an end to it.

[jesmu84]

That wasn't the problem, the issue was they were trying to grab as much profit as possible while assuming things wouldn't change and pouring millions into capturing those future profits.

Didn't you and I say the same thing?