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ESPN is not dying, but it is surely downsizing

   
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Years of cord-cutting and jumbo fixed rights fees have hit the Worldwide Leader hard.  Very hard.
multiple sources, 4-26-17
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NOTE: this posting is a slightly revised version of a Clips eFlash that was bulk emailed to all Clips subscribers on 4-26-17.
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Greetings from the Clips MediaShip.  Hope you are well.

You didn't ask, but I'll tell you anyway.  I am well.  Well, I'm not really that well.  I feel bad for the hundred or so ESPN people who got laid off today.  I know several of them.

And several of those ESPN people on the Clips Subscriber List.  If you are one of the ESPN people who got laid off today and you are reading this, then I will say this to you.  Yes, today definitely sucks, and tomorrow will suck as well.  But—as the days go on and on—you will slowly and surely get back to your former selves

I speak from experience; I have been laid off, fired, passed over for promotions, etc.  Those all sucked but I ended up learning from them.  You will too.
 

 
Okay, now back to the general reading population.  ESPN has had layoffs before (including 300 people in 2015), but this appears to be the first time with so many on-air (and writing) people.

Time for a muse  . . . I remember ESPN, personally.  It launched in 1979 in Bristol, Conn., just 17 miles away from my hometown of Torrington.  Astute and eagle-eyed readers will recall that the Clips MotherShipNorth is in Torrington, where my 93-year-old mother resides.

Aside: My mother is one of those senior citizens who has no idea in hell what ESPN is.  Her cable bill is made up of TV ($84.31);Internet ($48.44) and Telephone ($19.88).  Yes, Clips reimburses her for Internet.  My mother is also one of those senior citizens who pays for ESPN channels and she doesn't even know what it is.  But she has no choice; she has to pay.

For persons under 45 or so, it is hard to describe the wonder that cable TV was when it was intro'd in the 70s.  All of a sudden we went from four or five broadcast channels to 50 or so cable channels.  And ESPN's 24-hour all-sports network was one of them.

Fast forward through the 90s, 00s and 10s and ESPN was going gangbusters collecting a hefty bite of cable fees (my mother's included), and growth was very impressive.

The growth to 60-80-100 million bundled subscribers spun off riches to ESPN.  Life was good.  Very good.

We all know the story; ESPN has taken a big hit from cable cutters and the cable-nevers.  And ESPN is stuck with expensive rights fees.  . . . Thus the cost-cutting via layoffs.





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This is another textbook case in which the post mortem analysis is all too clear: ESPN should have known that the subscriber payments would plummet and ESPN should not have paid exorbitant rights fees.

Yup, easy to say now.

And one could further say that it's not "fair" that people have gotten laid off for the lack of foresight of the people at the top.

John Skipper has been president of ESPN since 2012.  I guess he's the right person to be running the company?  Or not?    Maybe he should be blamed for not seeing the obvious; maybe he should not?



Blame or not, right now he comes off as a bad guy by laying off of a hundred people.  That comes with being the head person sometimes.

Here's the announcement of the layoff by John Skipper: 





What comes next for ESPN?  Anyone's guess.

Below is an excerpted article from the top of the New York Times front page, along with articles from ESPN itself (exemplary word-spinning therein)

Have a good Wednesday.

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Nick Infante, Clips Editor

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EXCERPTED FROM:

A Struggling ESPN Lays Off Many On-Air Personalities

 

By Joe Drape and Brooks Barnes, New York Times, 4-26-17


 
The network has lost more than 10 million subscribers over the past several years. At the same time, the cost of broadcasting major sports has continued to rise. ESPN committed to a 10-year, $15.2 billion deal with the N.F.L. in 2011; a nine-year, $12 billion deal with the N.B.A.; and a $7.3 billion deal for the college football playoffs, among many others.

"ESPN was wrapped in Teflon for many years, but big payouts for rights fees plus significant losses in their subscriber base were like punches to the gut and head, and now the company is trying to make sure they are strong enough to fight in the future,” said James Andrew Miller, who wrote a book on ESPN and has contributed to The New York Times.


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In October 2015, ESPN laid off about 300 people, most of whom were not on camera. . . . . 

In a letter to employees on Wednesday, ESPN’s president, John Skipper, acknowledged the "difficult decisions” ahead and suggested what the network was looking for as it reshaped itself in the coming days.

"Dynamic change demands and 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,” Mr. Skipper said in the statement.

In the most recent quarter, Disney’s cable networks division reported $864 million in operating income, an 11 percent drop from the same period a year ago, with ESPN the reason for the entire decline . . . . .

 

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The ESPN layoffs come as Disney accelerates efforts to introduce an ESPN-branded subscription streaming service. The offering, expected this year and made possible by Disney’s $1 billion purchase in 2016 of part of BamTech, Major League Baseball’s streaming division, will include coverage of sports like hockey, tennis, cricket and college sports — mostly rights that are already owned by ESPN but not televised.

 

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Despite assurances by Mr. Iger (Disney president) that ESPN remains strong, investors and analysts have remained concerned about upheaval in the television business. Viewership via satellite and cable services is declining as streaming options proliferate, and ESPN, the naysayers contend, is particularly exposed to a slowdown because Disney has locked itself into lavish, long-term payments for sports rights. In a sign that Disney had done a good job preparing investors for the layoffs, shares climbed slightly in Wednesday morning trading.

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