ESPN Loses Another 2M Subscribers in Fiscal 2018
Was the network’s leftward lunge a desperate attempt to combat cord-cutting?
ESPN has been having a tough time figuring out what it wants to be. Having injected leftwing politics and political correctness into its lineup, many sports fans on both sides of the political aisle were disgusted. ESPN’s ratings declined and suffered some self-inflicted bleeding over, among other things, the NFL kneeling controversy.
Attempting to stem the bleeding, ESPN brought in a new president and slashed jobs and salaries. But ESPN lost an additional two million subscribers in 2018; this brings their total loss of subscribers to almost 12 million since 2013 and 15 million since 2011.
ESPN lost 2 million subscribers in the past 12 months, according to an annual earning report released by Disney, the sports network’s parent company.
. . . . Subscriptions account for more than 60 percent of ESPN’s revenue.
Overall, ESPN is responsible for almost 30 percent of Disney’s value, according to a 2017 Forbes report. Overall, according to the financial magazine, ESPN has lost nearly 12 million subscribers since the end of 2013, dropping from approximately 98 million to 86 million.
Much of the subscription loss is due to the national cord-cutting trend, but even with that in the mix, ESPN’s losses are further complicated by its heavy (and necessary) investment in sports rights.
The 15 million subscribers ESPN has lost over past seven years represent $1.44 billion in yearly lost revenue company will never book. Those revenue projections helped fuel the bids ESPN made for the NBA, NFL, CFB playoff, & more. That's a big problem. https://t.co/ADKbU2uXb1
— Clay Travis (@ClayTravis) November 23, 2018
Outkick the Coverage‘s Clay Travis reports:
Now every cable and satellite channel is losing subscribers . . . but the impact disproportionately impacts ESPN for two reasons: 1. the network makes far more in revenue off the cable bundle than any other channel so it stands to lose, by far, the most off the collapsing business model and 2. the network has guaranteed tens of billions in sports rights fee payments over the next decade and more to sports leagues.
Where does that money in guaranteed payments come from?
You and me who are paying our cable and satellite bills.
So unlike, for instance, CNN, which can simply cut back on costs for programming in the event revenues aren’t meeting projections, ESPN purchased much of its sports rights years ago before the full impact of cord cutting had become apparent to their executives. (The Wall Street Journal referred to these ESPN executives, who denied the impact of cord cutting, as “flat earthers” in a recent article).
The article continues with some interesting information about ESPN’s deals with the NBA, NFL/Monday Night Football, and etc., so check it out if you are interested.
Here's the big question ESPN faces, how does it avoid dying? Going political has finally been rejected as a disaster, ESPN+ isn't the answer either. How does the company survive as cord cutting slowly strangles it to death? https://t.co/ADKbU2uXb1
— Clay Travis (@ClayTravis) November 23, 2018
Travis does posit an interesting take on ESPN’s leftward lunge into politics: the sports network “went so aggressively left wing political” out of “desperation, a cry for relevance in a media market where that relevance was rapidly collapsing.”
For over a generation ESPN had the best business in media history as it built up 100 million cable and satellite subscribers, but now that business is rapidly unraveling, we are going to watch the collapse of ESPN over this current generation.
Remember, ESPN owes almost all of its audience to its purchase of sports rights. What is the company left with absent those sports rights?
. . . . This business challenge, by the way, is why I believe ESPN went so aggressively left wing political. It was desperation, a cry for relevance in a media market where that relevance was rapidly collapsing. I think ESPN executives put pressure on TV execs to increase ratings and the gambit was, let’s go political.
That, clearly, was a disaster that instead of rescuing the company actually accelerated ESPN’s own obsolescence.
To his credit ESPN president Jimmy Pitaro, at the direction of Bob Iger, has repudiated that programming decision and it has led to the departure of Jemele Hill, Kate Fagan, and other left wingers at the network. Now I think ESPN is hunkering down and focusing everything they have on sports.
This was reflected, interestingly, earlier this week when Fagan said she was leaving ESPN because she no longer believed ESPN had an interest in covering the intersection of LGBT and sports in the way she hoped they might. It’s a sign of how lost ESPN’s priorities had become that they were covering the intersection of sports and anything. How about instead of worrying about covering things that intersect with sports, you just cover sports?
Pitaro and Iger’s new idea, which I think is probably a smart one, is the best way to forestall your decline is to go hard after your base — ESPN is promoting those who love sports the most and kicking politics to the curb. It’s the strategy, honestly, they should have gone to four years ago.
ESPN’s streaming service ESPN+ was launched earlier this year, and in its first five months boasted one million paid subscribers, but as Travis notes, “Even assuming all of those million subscribers are paying $4.99 every month that’s just $60 million a year in revenue, or about what ESPN pays to air one single half of Monday Night Football on ESPN this year.”
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Count me as one of them.
I’ve been into sports my entire life but I don’t watch their stupid channel, don’t click on their stupid website, don’t read their stupid magazine.
If you have cable or satellite, it doesn’t matter if you watch them or not. You’re paying them anyway.
Do not have cable or satellite – so, yes, count me as one of those who told them (and others) to go screw themselves.
I definitely don’t watch them for the BS. But at some point before that, when it became way too much like TMZ, I lost interest in “talking about sports”.
I disagree with the premise that ESPN embraced divisive politics as a business decision.
It seems more likely that, in the network’s desperation, some SJWs saw an opportunity to serve the cause and, like a parasite killing the host, went for it, consequences be damned.
First it was the useless female sports pundits and game callers, bringing with them feminine politics and a perspective alien to male dominated sports such as football and baseball. Next it was the grievance politics of race, flavored by anti-Christian commentary and such left wing causes such as gun control.
The days of analysis by such as Madden and Dikta were gone, and so was the audience.
their “pretty face moderates discussion between 3 jocks” studio shows are all useless too. ESPN could show I Love Lucy reruns and get a bigger audience
Please vote up or down on your like or dislike on the latest introduction of “Pop Up of Top Articles” box which overlays on article content.
It’s absolutely horrible; it renders LI completely useless on a mobile device. I don’t mind it on my desktop because there is enough screen that it sits down in the (normally empty) gutter on the side, but on my mobile phone it obscures the majority of the screen and there is not way to get rid of it.
It wasn’t even done right. When one installs annoyances, these technicues are sure winners:
1) Delay the popup for about 20 to 30 seconds, then have it take over the screen.
2) LOUD audio.
3) It has to be. commercial announcement, not about articles.
4) Make the “X” closure link tiny, and in a low-contrast color.
5) Regading 4: don’t allow the closure link to display for at least 15 seconds.
There’s a right way, and a wrong way.
Being serious, I am willing to bed the price of a decent lunch that the annoyance will be gone a few hours after the holiday weekend is over.
On another post, LI is aware of the problem and will disable it, again probably on Monday or Tuesday when everyone is back at work, weather permitting.
As someone noted, having Ad Blocker on gets rid of the issue.
This is exactly why I have had an ad blocker installed for years.
I used to be willing to put up with a lot, but when sites were literally taking 10x the time to load the ads as the actual site itself, I installed it and never looked back.
Now I’m the one that just desn’t care. If site owners can’t care enough to do BASIC checks of ads that are put on their site, I don’t care enough to give them ad revenue, and they have long since lost the benefit of the doubt.
And if a web site complains that Adblock Plus is installed and won’t show the content I requested until it’s disabled, I close the site.
Ditto.
Nothing disgusts me more than sitting down to watch a game and having some punk SJW spew their moronic prog drivel in my face. I cut the cord a long time ago due to this. I am enjoying watching ESPN die a slow death. As a business executive, how fucking stupid do you have to be to purposely alienate half of your customers? Blow me and die.
On a related note, I also got sick of The Weather Channel for the same reason. There is a great Android weather app named “NWS Now” that provides simple, yet comprehensive, access to the wealth of weather information that is available through the National Weather Service. No ads, no commentary, and no “climate change” religion forced down your throat.
I cut the cord in part because I was tired of paying for the leftists ALL over the cable dial. MSNBC, MTV, ESPN,you name it, it was leftist. And Shep Smith on Fox…. WTH?!?!
I also disliked that most of the channels I was paying for, I had no interest in. The whole thing was a seller’s market and that left a bad taste in my mouth every time I had to pay the bill.
ESPN was shocked because before just a few years ago they’d never had to convince CUSTOMERS that they had to pay for their product!!!!
They could just do whatever they wanted and nobody else was carrying the games. Even before their obvious decision to go political, their ‘analysis’ shows increasingly became areas for people to argue about whatever political controversy was ‘affecting’ the players rather than the actual games.
Now that’s simply not true, in the age of the internet a whole bunch of leagues, teams, and games are no longer agreeing to exclusive rights for single networks.
ESPN, just like so many others like Blockbuster, Circuit City, Toys R Us, has finally found the end of their business model when they failed to adapt.
Cord cutting in a remote/rural area isn’t easy. We inherited Dad’s DirecTV setup at nearly $150/mo. Yikes! Turned that off and installed an large UHF antenna with a Tablo DVR device but get mostly Canadian channels from Victoria and Vancouver, PBS and MeTV. Tried Sling streaming which forces subscribers to chose one of two packages with either ESPN or Fox sports, and their respective news channels, for about $35/mo. with tax and their cloud DVR service add-on. We don’t watch sports or news at all so when Philo came along with all the cable entertainment channels we watch, and NO sports or news, we subbed for $20/mo which includes a cloud DVR and dumped Sling. Netflix is $12, Acorn (BBC) is $5 and those we toggle on/off when we’ve exhausted the content after binge-watching. $20-$35/mo. sure beats $150 with all of DirecTV’s forced content.
BTW, the Tablo Dual Lite device is on sale at Bestbuy for $99. You’d need a USB hard drive (laptop size) and their TV guide service for $49/year. With it we can watch recorded or live TV from any Android, smart TV, Roku/Fire device, or PC/mac on our home network. It’s also port configurable to allow streaming from anywhere on Android, etc. And has user developed apps that allow for converting recorded shows to MP4 which can be side-loaded on your phone or tablets anywhere.
Nice to have a TV setup we can control and enjoy – absent all the crapola we never watched but still had to pay for.
Political Congruence (i.e. selective, opportunistic) has a notoriously short lifetime, with cause.
Is ESPN *trying* to pancake into bankruptcy?
I mean they take steps to prioritize the socialist, left-leaning millennial by ramming that type of political content into sports shows, while the young millennial socialists are the ones doing the most cord-cutting. Gee, if only the sports channel were to broadcast… Oh, I don’t know… sports?
Heck, if we want socialist claptrap, we’ll watch CNN.
I still remember when MTV played music videos, only!
I wonder how Nike will fair this holiday season.
ESPN? What’s that?!!
LThe politicization of ESPN probably drove a lot of people who had not considered cutting the cord to start thinking about it. For me, I get basic cable stations as a package with high-speed Internet. (I asked how much I’d save if I skipped the basic cable and my provider said “nothing.”)
But I passed on the premium channels, in part because they are just too expensive but more because I am boycotting the NFL. Not watching them AT ALL now that I know how many of the players are anti-police and pro-criminal, if the criminals happen to be black. Rotten racist garbage.
Most Black Lives Matter icons were shot while committing attempted murder. Siding with attempted murderers over the people they are trying to murder purely on the basis of race? That is the most evil possible extreme of racism. Not a penny ever, scumbags.
So that makes the decision for me. No premium channels so long as ESPN/NFL are on the subscription list.