ESPN is "showing signs of stress as the pay-TV industry goes through an unprecedented period of upheaval," according to Ramachandran & Flint of the WALL STREET JOURNAL. Sources said that a decline in subscribers as customers "trim their cable bills, coupled with rising content costs and increased competition, has ESPN in belt-tightening mode." Nielsen data shows that the company "has lost 3.2 million subscribers in a little over a year ... as people have 'cut the cord.'" At the same time, the prices ESPN "pays for the rights to show games are ballooning." Rivals including Fox and NBC are "aggressively pursuing sports properties to feed their own outlets, which is also driving up prices." The company this week said that it is "parting ways" with Keith Olbermann after deciding in May not to renew the contract of "another big name" in Bill Simmons. Sources said that other ESPN talent "likely facing tough negotiations down the road" includes Mike Tirico, Michelle Beadle, Adam Schefter and Colin Cowherd. Ramachandran & Flint note sports "has long been viewed as the glue holding the pay-TV bundle together." But since July '11, ESPN’s reach into American homes "has dropped 7.2%, from more than 100 million households -- roughly the size of the total U.S. pay-TV market -- to 92.9 million households." Viewership of "SportsCenter," its "marquee and high-margin sports-news show, has sagged since September, due in part to the fact that younger consumers are increasingly finding sports news at their fingertips on smartphone apps." The financial stakes "are especially high for ESPN because it earns the most carriage fees of any TV channel," with SNL Kagan data showing the net receives "about $6.61 a month per subscriber" (WALL STREET JOURNAL, 7/10).
GOING IN THE OPPOSITE DIECTION: CNBC’s Kelly Evans said despite ESPN initiating some cost-cutting moves, its parent company, Disney, "has been on a tear." Evans said, "That's what makes this so interesting. It was often said that ESPN was the juggernaut and now it's showing signs of slowing. Disney is powering on.” CNBC’s Kayla Tausche: “It was thought that ESPN would be the holdout, that they really had all of the leverage against the cord-cutting revolution, that ESPN was still what people would pay for." But Evans noted people "are probably going to pay to watch their sports" (“Squawk Box,” CNBC, 7/10).
LAUGHING ON THE WAY OUT: Comedian Jim Gaffigan appeared on ESPN’s “Olbermann” Thursday night and referred to the host leaving the net. Gaffigan said, "I’m taking over your show.” Olbermann: “Good luck with that.” Gaffigan: “Next year is an election year, and I can’t imagine an election year without Jon Stewart and Keith Olbermann. What are you going to do?” Olbermann: “I’m going to become Donald Trump’s campaign manager” (“Olbermann,” ESPN2, 7/9).
