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ESPN Needs to Cut Tens of Millions in Costs

ESPN has been hard hit by cord cutting recently. Some news groups have reported that ESPN is even losing as many as 10,000 subscribers every day.

Now multiple sources said ESPN has been tasked with paring tens of millions of staff salary from its payroll including staffers many viewers and readers will recognize.

This all seems to be in an effort to counter the losses that are happening as more Americans become cord cutters. Some of it is being countered by the growing subscriptions to live TV services such as Sling TV, PlayStation Vue, and DIRECTV NOW; however, reports are they pay lower per-subscriber costs to ESPN than does a traditional pay-TV service.

ESPN is not only trying to cut costs but also is working on its own standalone ESPN streaming service. Reports are this will not offer live feeds of ESPN channels. It seems this new service will offer additional coverage and more live games than air just on ESPN.

Now ESPN is still very profitable, the problem is it just is not as profitable as it used to be for Disney. Though ESPN can still be what saves Disney TV in the long run. As many Americans see live events like sports as the number one reason to pay for a live TV service whether it be a streaming service or traditional pay-TV service.

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7 Responses to ESPN Needs to Cut Tens of Millions in Costs

  1. Avatar
    Chris K. March 7, 2017 at 11:04 am #

    As more American viewers shift to streaming services, I can’t imagine there will be much demand for ESPN’s massive schedule of “filler” content. Their live events will still see huge numbers (and I’m sure their advertising spots won’t get any cheaper), but how many viewers are watching ESPNNews, ESPNClassic, or round-the-clock Sportscenter like they were ten or twenty years ago?

    If ESPN can successfully go standalone like HBO did, that’s going to punch a big hole in traditional TV’s programming model.

    • Avatar
      Norman March 7, 2017 at 1:10 pm #

      They’ve already turned ESPN 2 into strictly a rerun program for ESPN 1 (sounds a lot like ESPN news). Looks like the golden goose has turned silver, maybe even bronze.

  2. Avatar
    frankinnoho March 7, 2017 at 1:11 pm #

    This is evidence the “pay-me-now AND pay-me-later” model of cable fees on top of commercial revenues is coming to a close. Sports networks are notorious for exploiting this model to the hilt, and getting very, very fat in the process. As a result, they have become the canaries in the coal mine, extremely sensitive to the slightest drop in revenue. Between what they’ve paid out in broadcast rights and the bloated cost for talent, they will not take retrenchment well.
    Next will be the multiple cable filler channels, like Bravo, that have a very ‘niche’ viewership. Some might survive as a Amazon Prime add-on, but most will go away, having never been more then a way to scoop up idle advertising dollars.
    Finally, the 24 hour cable “news” channels with their perversely bloated talent cost for their million dollar spokes models and paid talking heads. Even if not for cordcutting, the average age of their viewers tells you they are done in no more then ten years.
    In the end, will be back where we started, the broadcast networks. But they will drastically changed by all of this and will be mostly news and sports, with prime time resembling community access TV.
    All entertainment programming will have moved to on-demand: Hulu, Netflix, Amazon, HBO, etc. And because setting up and internet ‘channel’ is relatively easy, expect all the major sports leagues to join the MLB in streaming their own content. Individual teams might even go on their own.
    TV, as we have know it, is dying before our very eyes. Networks are going the way of the payphone. Cable companies are gonna undergo a major restructuring and bankruptcy related debt shedding on their way to becoming dumb pipes. A lot of people who got fat and happy as middlemen are heading to the unemployment line. The era of news announcers and sports players with $20 million plus salaries is likely over.
    But content is not going away. It will be different, leaner, meaner, but likely better, as they will now have to chase an audience rather then advertisers. And ultimately with much less big dollar talent soaking up all the money, their will be more money in the game for everyone else.

    • Avatar
      Bruce Wayne March 7, 2017 at 3:02 pm #

      Okay, Nostradamus.

    • Avatar
      D an March 7, 2017 at 5:40 pm #

      Amen

  3. Avatar
    Joseph ewing March 7, 2017 at 1:34 pm #

    But will they cut ESPN 8, the Ocho?

    “If its almost a sport, we’ve got it here.”

  4. Avatar
    Bruce Wayne March 7, 2017 at 3:07 pm #

    ESPN barely carries any football (soccer) content so I don’t really care.