It’s been a busy morning on Wall Street for ESPN’s parent company Disney – and not in a good way. Here’s a sampling of headlines from around the web after Disney’s stock plunged by $10 today:
- Disney Stock Tanks as Cable Revenue Disappoints – The Street
- Disney stock hit on ESPN fears – CNN
- Disney Falls as Revenue Misses, Cable Profit Outlook Darkens – Bloomberg
The table was set for this bad news in May, and internally, ESPN has been in a panic for quite some time. The cord cutting fears have gone from “potential problem” to “very real problem” faster than anyone imagined. When it became clear Keith Olbermann was leaving in early July, we explored the increasing cord cutting phenomenon, and reported how ESPN is under orders from Disney to pull a total of $350 million out of the budget in 2016 and 2017.
This, from the Bloomberg piece today, dovetails into what looms in the immediate future of programming at ESPN:
“Investors have become increasingly concerned about what kind of growth, if any, they can count on for ESPN going forward,” said Paul Sweeney, a Bloomberg Intelligence analyst. “This guidance cut will not allay any of those fears.”
ESPN’s President, John Skipper, is an erudite man with a scholarly background. With degrees in English Literature, he became a publishing man – Spin Magazine, Rolling Stone, ESPN the Magazine. His splashiest moves in 2013 were sharp, smart media types with writing backgrounds – Nate Silver, Jason Whitlock and Cornell-educated Olbermann. Skipper was a longtime advocate of Bill Simmons, who made his chops as a writer. Skipper loved to take risks on writers, which is just one reason the media industry loved him.
Skipper isn’t a TV guy. Has never been one. If you didn’t like or drink wine, would it make sense for you to run a winery? Skipper is an intellectual who is running a company that is heavily dependent on football right now, so much so that it pays (by far) more than any other network to televise one game a week and run highlights around the clock. Skipper loves the other futbol.
Now faced with his first serious problems as President of the network – massive cost-cutting; the loss of some of the network’s most visible, opinionated talent; having to make decisions on several vanity websites that look good on paper but are money pits – how will he handle it all?
For instance: SportsCenter ratings have struggled badly at times this summer. Everyone knows the score and has seen the highlights thanks to social media. Why is ESPN tripling-down on SportsCenter?
One theory floating around in Bristol: Disney (still stung from the Bill Simmons comments about the NFL commissioner – let’s be honest; everyone overreacted) and ESPN may be entering a world where it mostly wants to lean heavily on live sports events and then wrap SportsCenter or studio shows around them, with just a smattering of opinion shows off to the side on ESPN2.
That’s a risky proposition when you look at the way the internet and TV is headed – more strong, informed opinion, not less. It’s doubly risky when potentially your main TV rival has hired a man who just a few years ago expanded the strong opinion era at ESPN.