Richard Deitsch of Sports Illustrated has published his latest column, and in it he dropped a bomb which certainly has to make many inside of ESPN’s offices very uncomfortable. Deitsch says that according to information he’s received, another dark day is expected soon at ESPN.
The report says the company plans to do significant cost-cutting over the next four months, with most of the reductions taking place on the talent side. The company is being challenged to eliminate tens of millions of salary from its payroll, with industry insiders suggesting that the number could be as high as one hundred million dollars.
Deitsch warns that personalities who have their contracts expiring soon are especially vulnerable. ESPN will also explore buying out some existing contracts, something the company has traditionally stayed away from. The plan is for all of the cuts to be completed by June.
Behind the scenes people are not expected to be impacted, but when a company is going thru a process of eliminating people and payroll, you can never be sure until the final process plays itself out.
One of the driving forces behind the company’s decision to shed salary are a lower than expected quarterly revenue performance. Advertising revenues and subscriber numbers were down. The company has lost nearly 12 million subscribers since 2011. An escalation of rights fees during a time when ad dollars and subscriber totals have decreased also doesn’t help ESPN’s overall business.
This is not the first time ESPN will be forced to eliminate jobs. The company laid off close to 300 employees in 2015. Most of those jobs were behind the scenes positions.