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SBD/May 22, 2013/Media
ESPN Layoffs Reportedly "In The Low Hundreds," Including Over 100 At Bristol HQs
Published May 22, 2013
READING THE TEA LEAVES: The WALL STREET JOURNAL's Sharma & Fritz write the layoffs are a "sign that the hugely profitable sports cable-TV powerhouse is responding to the higher prices it is paying for rights to air games as well as other industry changes." ESPN is the "biggest part of Disney's cable networks division, which accounted for 69% of the company's segment operating income in the quarter ended March 30." ESPN also is "trying to reallocate resources as its priorities shift." For example, "consolidation in the pay-TV industry that has left fewer players means ESPN doesn't need as many resources dedicated to dealing with cable operators." A source said that the consolidation is "one reason ESPN this week closed its Denver office, which had about 20 people." The source added that ESPN also is "shifting more resources into its Web and mobile offerings, which have seen sharp growth" (WALL STREET JOURNAL, 5/22).
WAY OF THE WORLD: SPORTS ON EARTH's Will Leitch writes the job cuts have "proven galling to people in a way different than most media company's layoffs are galling." There is "of course the 'Disney making money like crazy' angle, but that's a small part of it." The issue here "was that ESPN was doing ESPN-y things -- making comically oversized sets that reek of Jerry Jones-ism, spending billions to wrap up rights to the NFL, US Open, SEC Network, so on -- on a macro level that required them to slash at the micro level." The company "expanded the things that are harmful to the sports world (rising rights fees, overly close business relationships with the leagues they 'cover,' a larger emphasis on programming rather than editorial) and cut back on what they provide for the sports world (jobs, stability, a sense that there's at least one place in this industry that isn't cutting back)." It is "sort of unfair to blame ESPN for a decision that Disney presumably forced upon them." However, when ESPN "slashes staff in part so it can run in-house back-patting documentaries about the greatness of the Southeastern Conference, well, you worry" (SPORTSONEARTH.com, 5/22).