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Virus-Related Declines For ESPN Could Spell Trouble For Disney

A lack of live sports could lead to a ratings decline by as much as 80% for ESPNESPN IMAGES

The coronavirus outbreak "could have major financial implications" for Disney, which has "long relied on huge profits generated" by ESPN, according to Battaglio & James of the L.A. TIMES. The virus outbreak "comes at a critical time for ESPN, which has already seen its profitability fall due to cord-cutting consumers who are canceling or forgoing pay TV subscriptions." Now, ESPN’s lack of live sports is "projected to lead to a ratings decline of as much as 80% and compound the problems for Disney, which has been reeling on multiple fronts due to the pandemic." Financial analyst Michael Nathanson on Tuesday wrote that Disney’s media networks will "likely take in" $250M less in revenue in FY '20 than "anticipated due to the sports cancellations." Nathanson added that if the rest of the NBA season is canceled, ESPN will "lose out" on as much as $475M in ad revenues. Battaglio & James noted there could be an additional $150M "decline in ad revenues related to all of the other sports that were shut down through the end of March, including the BNP Paribas Open" at Indian Wells. However, Nathanson "expects Disney to save hundreds of millions of dollars by not having to pay as much in sports rights, although there will be an investment" of as much as $100M "required to program the hours that would ordinarily be devoted to live coverage" (L.A. TIMES, 3/18).

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On this week’s pod, our Big Get is CBS Sports college basketball analyst Jay Wright. The NCAA Championship-winning coach shares his insight with SBJ’s Austin Karp on key hoops issues and why being well dressed is an important part of his success. Also on the show, Poynter Institute senior writer Tom Jones shares who he has up and who is down in sports media. Later, SBJ’s Ben Portnoy talks the latest on ESPN’s CFP extension and who CBS, TNT Sports and ESPN need to make deep runs in the men’s and women's NCAA basketball tournaments.

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