ESPN, the so-called worldwide leader in sports television, laid off over 100 on-air employees Wednesday, causing both cheers and jeers on social media and in other news outlets. This layoff comes less than two years after the sports media giant let go of over 300 employees in 2015.
While many are surmising an underlying cause for these reductions, the simple fact is the company is shedding operating costs.
ESPN’s drastic cost-cutting measures come amidst worry that America’s cable and satellite TV subscription cancellation trend will continue. The network has lost over 7 million subscribers over the last three years, and that trend doesn’t appear to be reversing as “cord-cutting” becomes more prevalent.
ESPN subscribers come in the form of cable and satellite TV accounts. When a monthly TV bill is paid, over $9 of it is going to ESPN for its networks’ content. (in 2011, that number was less than $5). If you do the math, 7 million lost subscribers at $9 per month is over $756 million in lost revenue, and that loss necessitates cost-saving measures like layoffs.
That revenue pinch could hit close to home for those in Provo, as BYU is in a period of negotiation with ESPN for the rights to broadcast its football and basketball games after 2019.
The high cost of sports