ESPN Wakes from Disney Fairytale As Job Cutbacks Loom
ESPN, tagged as worldwide leader in sports, has been woken from its Disney-inspired dream, as reports are confirmed that layoffs are in the horizon. The planned layoffs are mainly to affect the ESPN on-camera talents and the decrease in ad revenue is tagged as the culprit in this development.
This comes to light as the last layoffs by the Walt Disney-owned company just happened in 2015 due to the sharp decrease in cable subscribers. People behind the camera were affected in that round of job cuts.
Budget Cuts - Goodbye, Jobs
According to New York Post, ESPN aims to create on-demand entertainment that could be streamed directly by the consumer, as they try to deal with the fact that subscriber base is down to its lowest. Another factor seen in the ESPN layoffs is the burgeoning broadcast rights fees that some sports are asking from them. It has been a practice in the past that ESPN practically agrees to the price set by the leagues and then try to recover the money from the subscribers.
But now that Disney has scheduled a massive cut in ESPN's budget, the network has no choice but to cut down in spending and the layoffs would also cover the deficit. No ESPN anchors' names have come up but experts agree that those with contracts up for renewal will get the boot.
What Caused This?
Falling ratings, tough competition have taken a toll on the juggernaut of sports television. ESPN is still the leader of the pack but the recent layoffs suggest that things are not as rosy as they once were. Disney acquired ESPN as part of the package in its purchase of ABC for $19 billion in 1998. But as of 2016, Forbes only lists the brand value of the sports network at $16.9 billion with the aforementioned factors affecting the profit margins. ESPN sits at #31 in the Forbes World's Most Valuable Brands list.
Per Bloomberg, the on-camera talents layoffs are predicted to happen by June 2017.