ESPN Might Face Job Cuts As It Tackles Market Challenges

There might be more bad news for ESPN: As many 300 people there will lose their jobs soon after parent Disney ordered the sports enterprise to slash the 2016 budget by $100 million and the following year’s by $250 million, sports news site The Big Lead reports.

ESPN disputes the budget-cut figures but isn’t discussing details. While it won’t confirm or deny the layoffs, the company says in a statement that it “has historically embraced evolving technology to smartly navigate our business. Any organizational changes will be announced directly to our employees if and when appropriate.”

Reading between the lines, that seems to suggest that if there are job cuts at ESPN then they would be strategic — tied to changes in the business — as opposed to mere cost reductions.

Still, the news follows a series of developments that indicate Disney has concerns about its most profitable asset. The company’s share price is down 15.7% since August 4 when it reported that ESPN’s “modest” sub losses meant that the year’s domestic cable affiliate revenues would, as CFO Christine McCarthy put it, “fall a bit short of our previous expectations.”

Others warn that ESPN’s sub losses could pick up as pay TV and streaming services introduce skinny bundles, low-priced packages with fewer channels than most buy in the expanded basic bundle. Last week, Morgan Stanley’s Benjamin Swinburne noted that “few of the currently available skinny bundles include ESPN.” He estimated that Disney’s cable affiliate revenues could end up as much as $300 million lower in the fiscal year that ends next year than they were in 2013.

Meanwhile, programming costs continue to rise. For example, ESPN’s payments for the NBA are due to increase $550 million in 2017. And Fox and Comcast are moving aggressively into sports with the launch of channels including Fox Sports 1 and NBC Sports Channel.

Separately, The Big Lead reports that ESPN plans to reduce the time it now devotes to SportsCenter’s weekday early afternoon broadcast, and then eliminate the 3-6 PM live show.

ESPN says that “SportsCenter will present regular live updates on TV from 1:30 to 6 p.m. each weekday, and will be in position to break into network coverage when news developments warrant. In addition, the afternoon SportsCenter group will produce unique new content for all digital and social platforms. Existing resources will be allocated among these and other initiatives.”

The channel adds that it has “already begun a series of strategic enhancements, including SportsCenter on the Road, the launch of Scott Van Pelt’s show, additional live hours on weekend mornings and, starting in February, live shows from 7 to 9 am ET.”

This article was printed from