ESPN viewership plummets, rising costs result in mass lay-off

MUMBAI: Trimming around 10 per cent of writers and on-air talent, plans to lay off around 100 ESPN employees is under way, including Len Elmore, Trent Dilfer and Danny Kanell, former athletes who worked as broadcasters -- the aim being switching to a digital strategy.

While longtime NFL reporter Ed Werder was among the first to state that he had been laid off, Kanell is among the newest wave of layoffs. In October 2015, ESPN, which employs 8,000, laid off around 300.

The pruning, an ESPN decision as it recasts itself for the future and not a mandate from the parent -- Disney, will affect "front-facing" employees. But, the people who have contracts will see those deals fully honoured.

ESPN head John Skipper announced that it was beginning its next round of layoffs, a long-apprehended move. Skipper had said that it wanted to provide continuous distinctive content on multiple screens, with more personality-oriented 'SportsCenter' broadcasts.

ESPN, which has a tie-up with Sony Pictures in India, is into its 36th year but it has been troubled by escalating fees to broadcast live events at the same time millions of cord-cutting television viewers who have been canceling their ESPN subscriptions. Over the past five years, the network lost around 12 million subscribers as the viewers sought cheaper entertainment avenues. At the same time, the money ESPN has paid to the professional sports leagues to acquire their live events steadily climbed.

ESPN used to be in around 100 million houses, and now it's in less than 87 million, according to Nielsen. And, ESPN commands around 7 per subscriber per month, so that loss ends up being a lot of money.

Last year, the network's new nine-year agreement with the NBA to telecast pro-basketball games cost around US$1.5 billion per year, a significant increase over the previous deal. The network also had paid NFL US$1.9 billion (annual), NCAA conferences and the College Football Playoff (well over US$1 billion), and Major League Baseball ($700 million). Some of those deals would be up for renewal in the near future.

Dynamic change demands an increased focus on versatility and value, and as a result, we have been engaged in the challenging process of determining the talent necessary to meet those demands, Skipper said.

ESPN's corporate parent, the Walt Disney Co., in February 2017, blamed the network for an 11 per cent drop in operating income in its cable TV division during the final quarter of 2016.

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