It was just two paragraphs, and they were buried at the bottom of a Bloomberg Business story in early May about Disney’s soaring profits. The headline – “Disney Profit Tops Estimates on Theme Parks, ‘Frozen’ Toys” – wasn’t one that would prompt sports fans or media members to read the story. But these two paragraphs prompted a significant internal memo at ESPN that will have lasting effects:
Rising costs ate into earnings at the company’s largest division, media networks, which includes ESPN, the Disney Channel and ABC. While sales rose 13 percent to $5.81 billion, operating income dropped 2 percent.
Disney blamed higher programming and production costs at ESPN, which pays billions for rights to air live sporting events. Profit jumped 90 percent at ABC, thanks to higher affiliates fees and advertising revenue.
Timing is everything, even at billion dollar companies. Soon after, an internal memo went out to cabinet level higher-ups at ESPN, detailing how salaries for talent are impacting the rising production costs. Of course, numerous other factors were at play, including ESPN’s expensive new deal with NBA (which will soon be driving up costs from an estimated $430 million to over $1 billion a year), increasingly traveling SportsCenter, and so on.
But who are we kidding here – ESPN prints money.
Yet, three days after this earnings report, ESPN President John Skipper announced that Bill Simmons would not be re-signed. Skipper would later say it “did not come down to money,” but you know what H.L. Mencken says about that. In addition to the money, there’s the whole Goodell-is-a-liar comment, and a subsequent one about testicular fortitude, and more than a handful of Skipper’s lieutenants had been in his ear about Simmons for years.
It seems that elsewhere in 2015, anytime ESPN could save some money on personnel, it jumped at the opportunity.
Bob Knight and Lou Holtz – who were both near retirement anyway – departed. A SportsCenter host who attempted to almost double his salary during contract talks was shown the door. Mark Schlereth’s overall deal got cut – some of that was him wanting to dial back his duties — as he left his ESPN radio show. Jason Whitlock was removed as the boss of the website he was hired to run, The Undefeated. Whitlock’s move wasn’t a cost-cutting move, but it was described this way in a press release: “we have collectively decided to make some structural adjustments that will maximize the skill sets and strengths of our team.”
This week, another cost-cutting move went down: A month after ESPN announced that the network’s flagship radio show, Mike & Mike, was moving from Bristol to New York City, they had to walk that back. It’s not happening, ESPN announced today. What you won’t see in that press release: There is financial pressure from Disney to cut costs.
And there are potentially larger moves on the horizon that may save the company money. Keith Olbermann, who returned to ESPN in 2013 amid much fanfare, is in the middle of his contract talks. Though he may stay, there is a sense that with 2016 being a political year, Olbermann could return to cable and dive back into politics.
Then there’s Nate Silver’s 538 website. He also joined ESPN in 2013 during Skipper’s hiring binge in an effort to collect talent ahead of Fox Sports 1’s arrival. 538 has been all over the place and lost its managing editor in late 2014, before recently hiring another. Two of the website’s most-cited posts are about Burritos and Fast Flights.
As such, a lot of people are asking what will become of Nate Silver now that Bill Simmons and Jason Whitlock have been removed from the top of their ESPN verticals. One popular answer: Silver departs before the election year begins, and 538 is rolled into ESPN.com or perhaps shuttered altogether. Or, perhaps they could do something like they did with Whitlock, and remove him from the responsibilities of running his own publication, so he can focus on maximizing the value of his own content at the time in the news cycle where it’s most relevant.
What does all this movement mean?
It’s probably a combination of things – talent doesn’t really matter as much as it used to at a time when ESPN is tripling down on SportsCenter; in hindsight, Skipper made a few panicked moves in 2013 as FS1 was getting ready to launch, borne out of fear of the unknown; and finally, perhaps there is dissension among the ranks in Bristol between their vision and that of Skipper, a notorious risk-taker.
The most popular theory among ESPN’ers: ESPN President John Skipper is not in control. He’s in a vulnerable spot.
Credit to The Big Lead who originally published this article
Jason Barrett is the owner and operator of Barrett Sports Media. Prior to launching BSM he served as a sports radio programmer, launching brands such as 95.7 The Game in San Francisco and 101 ESPN in St. Louis. He has also produced national shows for ESPN Radio including GameNight and the Dan Patrick Show. You can find him on Twitter @SportsRadioPD or reach him by email at JBarrett@sportsradiopd.com.
Netflix CEO: ‘We’re Not Anti-Sports, We’re Just Pro-Profit’
“He characterized expensive media rights as a “loss leader” in the streaming world and noted that Netflix doesn’t view sports as a necessity to grow.”
Netflix will not join Apple and Amazon in the rush to gobble up live sports rights. Co-CEO Ted Sarandos addressed the streaming giant’s disinterest at the UBS Global Technology, Media & Telecom Conference on Wednesday.
He characterized expensive media rights as a “loss leader” in the streaming world and noted that Netflix doesn’t view sports as a necessity to grow.
“We’re not anti-sports,” Sarandos said according to Deadline. “We’re just pro-profit. We have yet to figure out how to do it. But I’m very confident we can get twice as big as we are without sports.”
Questions about the interest the company has in carrying live sports have come up several times in the past. Sarandon made similar comments last year when asked about it.
Reed Hastings, Sarandos’s co-CEO at Netflix, has a slightly different view. In 2021, he indicated that Netflix could be interested in F1 rights someday thanks to the success of its documentary series Drive to Survive, but that would be a special case. Any league interested in doing business with Netflix, he said, would have to allow Netflix to control all of its content.
Ted Sarandos echoed that sentiment in his most recent comments. He said that the company does not see a way to profit by “renting big-league sports.”
FOX Sued for Patent Infringement Over NFL Scheduling
“Recentive Analytics filed suit against FOX in a Delaware federal court on November 29 according to Yahoo Sports.”
An analytics company is suing FOX over claims that the network developed a mapping tool using their patented technology to create a season slate of NFL games.
Recentive Analytics filed suit against FOX in a Delaware federal court on November 29 according to Yahoo Sports.
The lawsuit claims FOX used access to Recentive’s predictive analytics tools to develop a resource of their own that would create optimal schedules for its 1 and 4 p.m. NFLwindows.
The company is seeking a declaration that FOX infringed on two of its patents. Recentive is also suing for damages and wants an injunction keeping FOX from using Recentive tech and preventing the network from “selling, offering for sale, marketing or using any internal network and mapping analytics tool for the scheduling and regionalization of events covered by the patents.”
Jordan Bondurant is a features reporter for Barrett Sports Media. He works full-time as a multimedia specialist at the Virginia State Corporation Commission, while also putting in part-time work for News Radio WRVA and 910 The Fan in Richmond. Additionally, you can find Jordan contributing coverage of the Washington Capitals for the blog NoVa Caps. His prior media experiences include working for the Richmond Times-Dispatch, the Danville Register & Bee, Virginia Lawyers Weekly and ABC 8News. He can be reached by email at email@example.com or follow him on Twitter @J__Bondurant.
FOX Will Use Chris Fallica On Belmont Stakes Coverage
“While the Preakness and the Kentucky Derby remain at NBC, The Belmont Stakes is moving to FOX as part of the network’s deal with the New York Racing Association.”
The Bear will be more than just a college football presence when he moves to FOX. Chris Fallica wrapped his final duties for ESPN last week and is now headed to a new network and will tackle some new responsibilities.
Fallica’s new role at FOX will involve plenty of sports gambling content. Richard Deitsch of The Athletic reports that content will include horse racing.
“One Fox Sports source said look for him to appear on the Belmont Stakes coverage,” Deitsch wrote in his weekly media column.
Starting in 2023, horse racing’s Triple Crown will not be seen all in one place. While the Preakness and the Kentucky Derby remain at NBC, The Belmont Stakes is moving to FOX as part of the network’s deal with the New York Racing Association.
How the network intends to use Chris Fallica on the broadcast is not clear. Given that he is coming to the network to contribute to gambling conversations, it is likely he would either be making picks or at least reviewing odds right up to the start of the race.