John Skipper walked into the Crowne Plaza Times Square in New York last Wednesday at 7 a.m. He was on a mission for more than just breakfast. He was there to counter a growing narrative that the ESPN empire was suddenly vulnerable.
For weeks, Skipper and his top executives have seen headlines about subscriber losses, talent defections and the layoff of more than 300 people at the company late last month. In his first public comments since the job cuts, Skipper, ESPN’s president, wanted to change the story and supply a firm vision of a network that is still culturally influential and has a strong path toward growth.
In an often feisty 30-minute sit-down with SportsBusiness Journal Executive Editor Abraham Madkour that opened the NeuLion Sports Media & Technology conference, a more forceful and less off-the-cuff than usual Skipper pointed directly to a full room of attendees while rolling off statistics, facts and anecdotes about where ESPN is now and where it plans to go.
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Skipper made his points at last week’s Sports Media & Technology conference.
Photo by: MARC BRYAN-BROWN
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On ESPN’s challenging headlines: “My suggestion is that narrative is dramatically contradicted by the success of ESPN. We just finished our fiscal year … and we finished the year for the first time in five years as the No. 1 cable network among all key demos. … So we do not have a narrative of declining usage at ESPN. We are fine, because people continue to want to watch sports.”
On audience growth: “We are interested in incremental viewers on other platforms, and that is our reality right now, as we are adding viewers on other platforms to supplement our continuing strong ratings on television. … We expect all of this to grow. So there is no narrative around declining fan interest on ESPN. Fans continue to vote with their eyeballs to watch ESPN. We are five times larger than our nearest sports cable competitor. We are 42 percent larger than the combined ratings of all other sports cable networks put together. So people seem to continue to enjoy ESPN.”
On the layoffs: “We laid off employees — and I want to be clear it was the most difficult week of my tenure at ESPN. … We do not make those decisions lightly, and we understand that we are affecting people’s lives and we appreciate their contribution. On the other hand, we are doing what we need to do to succeed in the world, and that is to make sure we are organized in the best way to take advantage of that. If you are cutting jobs in retreat, you are in trouble. If what you are doing is preparing to have a modern workforce, with the people we need to adapt to the changing environment, then we are preparing for success. And that is what we are doing, and that’s why those actions of last week are not contradictory to a narrative of success. … It’s managing our business.”
“We will continue to hire new people,” Skipper said. “We will continue to start new ventures. … We are not retrenching. That is a misinterpretation of what happened last week. What we are doing is preparing ourselves to continue to succeed. …[But] be clear, the action was intended to save money and to make sure that we are as cost efficient as we can be. Those are not contradictory.”
Skipper also responded to sentiment that the network has overpaid on its recent rights agreements and stressed how ESPN values rights differently than its competitors.
“I do take exception to any suggestion that we are not thoughtful to how we spend,” he said. “There is a new narrative around our spending too much on the NFL, and it is woefully uninformed to compare our spending on the NFL to the other networks, because we don’t buy 17 three-hour windows. … And we monetize every bit of this. … I would guarantee you that our return on a dollar spent on the NFL is higher than anyone else who spent on the NFL. So it is inadequate to suggest that we pay too much money. We have the best deal in the business.”
Asked if one of the next major packages up for bid, the Big Ten Conference, was “must-have” programming, Skipper said, “I would call the Big Ten top-tier, great programming. You can’t call anything must-have, because there is a point in time which any programming you may have to walk away from compared to what you have to pay. … We love the Big Ten; we want to remain in business with the Big Ten.”
The changing marketplace of consumers was another topic.
“I take exception with the idea that you have seen a diminution of the number of people who receive ESPN platforms or who get ESPN,” Skipper said. “There are going to be places in the ecosystem where there will be decreases and there will be places where there will be increases. And the only question is whether we emerge in this changing universe with more people consuming our product and more revenue or less. … We continue to have a very robust return from the pay-television universe. … I do not accept a proposition that we will reach less people.”
When asked about the recent high-profile departures of Bill Simmons, Keith Olbermann, Colin Cowherd and Jason Whitlock, Skipper instead focused on the talent that the network had recently signed and moved into more visible roles. “We don’t have a talent drain,” he said. “We miss those people and their contributions. We wish them well — sort of,” he said, laughing.
But it was easy to sense that continued comments from Simmons about a lack of support and lack of resources for the Grantland product perturbed Skipper.
Skipper also was asked about the perception that Simmons lost his job over criticism of Commissioner Roger Goodell and the NFL. “That’s completely wrong, of course,” Skipper said. “Of course it’s wrong. Bill was allowed for 14 years an extraordinary amount of freedom to express himself, including dramatic expressions and criticism of the NFL. That is an inaccurate narrative. He left to pursue other opportunities, which I believe he will succeed at. We appreciate what he did at ESPN. I do not appreciate his suggestion he did not get supported. That is just inaccurate also. … We had a very robust staff on Grantland. I’m very proud of what those people did. I appreciate what Bill did, as well. It is tiresome to have to continue navigating the noise around that, and I think that’s my final word on that.”
At the end, Skipper exited quickly, but a buzz remained throughout the day. Most commented on Skipper’s strong words and body language, both of which left little doubt that the network is under scrutiny, and going forward, industry debate will be whether ESPN’s performance lives up to its boss’s bold predictions.
