By Danny Emerman (Online Editor-in-Chief).
Last week, ESPN, the Worldwide Leader in Sports, laid off 100 employees—10% of their content producers—amid a significant drop in cable subscribers, massive live game contracts, and an evolving sports media landscape.
Among the layoffs include Trent Dilfer, Ed Werder, Marc Stein, Chad Ford, Andy Katz, Jayson Stark, and a significant amount of NHL staff. The company laid off 300 employees in 2016.
Nathan Pomerantz, an SHS junior who watches SportsCenter every morning, says that the company’s credibility is declining and the layoffs are a serious sign of instability.
“It’s clearly going downhill and I don’t think it’s coming back,” Pomerantz said. He also cited the way ESPN covered the DeflateGate controversy as an example of bias against New England locals.
ESPN had to make tough personnel decisions mainly because their revenue streams are coming up short of their projections. The company, which is owned by Disney, is still making money, but large league deals and subscription decreases has hurt its business.
ESPN’s subscriber base has declined by over 10 million since 2011, according to to Columbia Journalism Review, amidst evolving consumer habits. Cord-cutters, including SHS freshman Brian Higgins, have elected not to fork over the industry-leading $7.21 per month for the 24/7 sports channel.
“A necessary component of managing change involves constantly evaluating how we best utilize all of our resources, and that sometimes involves difficult decisions.” ESPN President John Skipper wrote in a note to employees.
“Dynamic change demands an increased focus on versatility and value, and as a result, we have been engaged in the challenging process of determining the talent—anchors, analysts, reporters, writers and those who handle play-by-play—necessary to meet those demands,” Skipper added.
One of ESPN’s problems is simply evolving technology, which is the “dynamic change” Skipper is referring to. Its flagship program, SportsCenter, is becoming obsolete because sports fans can watch highlights tailored to their specific interests on their cell phones.
However, senior Sai Bhasin, a sports fan, appreciates the convenience of the highlights show and predicts ESPN will not dramatically change its programs over the next 10 years.
“It’s always on. Instead of looking for it on my phone, I can just see it on my TV,” Bhasin said.
ESPN has tried to adapt by adding more opinionated segments and feature stories to its programs. freshman Griffin Yas, who doesn’t watch SportsCenter as much as he used to, noticed the trend.
“It’s more ‘news-y.’ It’s not as interactive with the audience as it used to be. There used to be Top-10s everyday, but now it’s just about news,” Yas said.
“It’s not as exciting anymore,” he added.
The layoffs are arguably most directly correlated to ESPN’s massive contracts with professional leagues to stream live content. ESPN has agreements with the MLB, NBA, NFL, and NCAA to broadcast live events to varying amounts of frequency.
These streaming deals are extremely expensive. For instance, they pay roughly $2.6 billion a year to air NBA action, according to The New York Times. In 2011, ESPN renewed its contract to broadcast Monday Night Football for $1.9 billion per year.
According to Kevin Draper of Deadspin, ESPN, along with cable networks such as CBS and NBC, bet that live sports will survive the cord-cutting generation because games are “DVR-proof.” In his article, he suggests the live sports bubble could be bursting.
Sports media reporter Bryan Curtis of The Ringer sees parallels between ESPN’s situation and the state of the newspaper industry in the 21st Century.
“The ESPN layoffs remind me of the gutting of newspaper sports pages that has been going on in fits and starts for two decades. Talk to people who worked for newspapers in the ’90s and they’ll tell you they thought their paper was as “invincible” as the Worldwide Leader. After all, classified-ad dollars were going to keep rolling in like cable subscriber fees,” Curtis wrote.
ESPN employees are still (for the most part) doing good work, but the business model is not as infallible as everyone once believed.
“When the first layoffs came, they didn’t take out the loudmouth columnist, just as ESPN didn’t take out Stephen A. Smith. No, the first layoffs surgically removed the organs of the paper — that feature writer graying at the temples; the horseracing writer; the sports TV columnist,” Curtis said.
“And so ESPN cut Jeremy Crabtree, who covered college recruiting; soccer writer Mike L. Goodman; and the redoubtable Werder, who wore a hole in the ground standing outside the Cowboys’ practice facility in Valley Ranch.”
According to Draper, it is important to note that the layoffs were not buyouts, so ESPN will continue to pay the ex-employees for the length of their contracts. “If Marc Stein—or any other laid-off ESPNer—wants another, likely less well-paying, job, they will still have to go back to ESPN and negotiate an exit,” Draper said.
As ESPN loses subscribers and forks over billions of dollars to the NBA, NFL, NCAA, and MLB, they have chosen to trim the fat of the company to trim the budget and appease its parent company, Disney. Since production and salary costs are the largest items that can be cut, ESPN laid off 100 more employees and its future as the “Worldwide Leader” is becoming more uncertain.