Despite holding the television rights to nearly every sport that anyone wants to watch, ESPN apparently is not the cash cow that it once was for parent company Disney, which reportedly is demanding that the all-sports network slash its budget over the next two years.
In Wednesday’s story about Keith Olbermann’s impending departure from the network, the Hollywood Reporter says Disney is forcing ESPN to cut $100 million from its budget next year and a staggering $250 million from its budget in 2017. The Wall Street Journal reported Thursday that ESPN has lost 3.2 million subscribers in more than a year and that ESPN’s reach in U.S. households has fallen 7.2 percent since 2011. Last month, Bloomberg reported that operating income dropped 2 percent at Disney’s media networks division, which includes ESPN.
Not renewing Olbermann’s contract when it expires at the end of the month is just one sign of the serious cost-cutting at ESPN:
— It didn’t renew Bill Simmons’s contract after he reportedly demanded $6 million per year.
— It reversed course on moving the “Mike & Mike” radio show to the same Times Square studio used for Olbermann’s show after making a very public announcement that the show would be moving from Bristol to the Big Apple. ESPN leases the studio from Disney at a cost of $40 million, according to the Hollywood Reporter.
— Lou Holtz, Bobby Knight, Mark Schlereth, Bram Weinstein: All allowed to retire or walk away or agreed to have their roles drastically reduced. Weinstein reportedly wanted more money than ESPN wanted to pay him.
And that could merely be a taste of what’s to come, especially with ESPN’s NBA costs ballooning from $485 million per year to to $1.47 billion annually starting in 2016-17. The Big Ten’s TV rights are coming up for renewal soon — it’s the only major U.S. sports entity with a looming negotiation — and considering the current economic climate at ESPN, it wouldn’t be surprising if the conference’s games move someplace else after the 2016-17 season, when the current deal ends. The network currently pays the conference $100 million a year to televise college football and basketball games, and that number is sure to significantly increase.
Viewers also likely can expect to see ESPN’s announcers call even more college basketball games from a studio in Bristol instead of live at the stadium, as they did for 47 games last year (to tepid reviews). Those traveling “SportsCenter” extravaganzas you’re seeing this summer also could get cut back.
And if I were working for a Simmons-less Grantland, 538 or the perpetually stalled Undefeated project, I’d also be a little wary.
In the meantime, we’ll all wait and see what ESPN does with radio host Colin Cowherd with his contract expiring later this year. He’ll want more than he’s making now, obviously. Whether ESPN will pay him remains to be seen.
Credit to the Washington Post who originally published this story