Sports media: ESPN’s troubles have only just begun
For years and years, while other media wings — print, radio, etc. — took one beating after another, ESPN enjoyed huge revenues, and spent money accordingly.
ESPN didn’t spend beyond its budget. Because ESPN didn’t really seem to have a budget.
This week, the clock finally struck midnight on that business model, as ESPN laid off 100 or so employees, including some of the most influential names in sports journalism, like Jayson Stark, Andy Katz, Brett McMurphy, Dana O’Neil, Jim Caple and Ed Werder.
Also among the cuts was Michigan alum Chantel Jennings, a very good college sports writer. She took to Twitter to announce her departure, and impressively, she took the high road, sharing a riveting story about how she first got the job at ESPN.
“I’m excited for this next chapter of my life,” she wrote. “Don’t get me wrong. This hurts. A lot. But I am profoundly thankful for the last six and a half years at ESPN and whatever comes next will be built on the foundation I laid there.”
This is the second round of ESPN layoffs, after cuts in October 2015. Those were mostly behind-the-scenes cuts. These were bigger names. And there certainly are more to come.
ESPN decided long ago, as TiVo and later DVRs became a thing, that the one thing most television viewers insist on watching live is sports. And that’s true.
Still, ESPN clearly overshot the mark. ESPN has committed more than $5.5 billion a year toward professional and college sports rights, including $1.9 billion a year for the NFL, $1.4 billion for the NBA, $700 million for Major League Baseball and $608.3 million for the College Football Playoff.
Those costs need to be made up somewhere, and they were, in large part, passed on to the customer via carriage fees — every cable customer in the country pays about $10 a month for ESPN’s family of channels (whether it wants them or not), easily the highest fee for any network. For some perspective, Fox Sports Detroit costs you about $4.50 a month.
That means, every cable customer from Maine to Maui is spending about $120 a year just for the ESPNs — and not every person in America is a sports fan. Yet, they all must pay. It’s kind of like McDonald’s saying, “You want fries with that? No? Too bad. You have to, if you want that Big Mac.”
Carriage fees, of course, have sent cable bills skyrocketing, well beyond $100 a month.
No surprise, a few years back, viewers began fighting back, and that continues in large droves.
Those rising bills led to a rapid rise in cord-cutting — or getting rid of traditional cable, for cheaper streaming options, like SlingTV, PlayStation Vue, Netflix, Hulu and Amazon Prime. You can have have subscriptions to all of those for, in many cases, cheaper than one cable bill.
So, the cord-cutting phenomenon isn’t slowing down. It’s becoming increasingly popular, especially among millennials — the generation whose spending habits matter, big-time.
Sports rights led to larger carriage fees, which led to larger cable bills, which led to cord-cutting, which led to a huge loss of money for ESPN (in carriage fees and advertising revenues resulting from lower ratings), which led to layoffs. The theory making the rounds on social media, that ESPN’s customer base is down because of left-leaning political views is nonsense.
Among the biggest ESPN departments hit: College sports, the NHL (not that ESPN has cared about the NHL anyway) and MLB, which also lost personalities Jim Bowden, Doug Glanville, Dallas Braden and Raul Ibanez. Word came Thursday that ESPN is cutting back significantly on longtime staple, “Baseball Tonight,” and will air MLB Network’s signature daily show, “Intentional Talk,” on ESPN2.
Once upon a time, ESPN could do no wrong, in the eyes of its stockholders.
Doing right is going to be a painful process, one that’s only just begun.
Some Fox Sports Detroit items:
■At 11 p.m. Friday, following the Tigers-White Sox game, the network will air a one-hour documentary called, “A New Day in Detroit,” which tells the story of the city’s renaissance. Impressively, it’s narrated by Oscar-winning actor and Michigan native J.K. Simmons.
■Tigers play-by-play man Mario Impemba, for the fifth season, is welcoming military veterans to Comerica Park. Every Monday home game during the 2017 season, Impemba brings in a group of veterans, who get a suite ticket, transportation to the ballpark, a shirt, food and beverage, and a meet-and-greet.
Retired football player Braylon Edwards made his 97.1 The Ticket debut on Thursday night, co-hosting an NFL Draft show alongside Jeff Riger. So let the speculation begin on whether Edwards could be in the mix to work with Mike Valenti, in the wake of Terry Foster’s retirement. Edwards is a Michigan alum, Valenti a well-known Michigan State fan. Those would be some fireworks.
Riger, who filled in when Foster was out following a stroke last year, probably remains the favorite to eventually join Valenti, and rightfully so. He’s as hard a worker as there is in this media market, and even better, he doesn’t take himself so seriously. That’s a quality that endeared Foster to listeners for years.