ESPN Layoffs

ESPN will do a second round of layoffs, this time of in-front of the camera personnel.

The most immediate causes of the layoffs are clear. Over the last several years rights fees have skyrocketed, with ESPN now paying over $3.3 billion annually just to broadcast the NFL and NBA. Simultaneously, ESPN’s subscriber count and viewership—the fabled dual revenue stream that has made it the most envied television company in the country—have tumbled. While the loss of 12 million subscribers over five years is mostly due to generalized cord cutting, and not subscribers specifically dropping ESPN, it doesn’t really matter: It still amounts to losing almost a billion dollars annually. The status quo is unsustainable, and with rights fees already locked in for several years, salaries are one of the biggest areas available to cut expenses.

I cut the cord this winter. The biggest downside will be the inability to watch Red Sox game (they don’t stream on MLB TV because I’m in the Red Sox broadcast area) FoxSports1 games on Saturday, and ESPN Sunday night games. Luckily, I can still listen on streaming audio. I’ve been streaming some spring training games and WBC games, and they look great. For the playoffs, I can buy one of the streaming services like Sling for a month.

We will see what this means for baseball. Rights fees may drop, because networks will no longer have the subscriber base to support the advertising. With MLBAM, however, the majors can take over advertising. At the moment, there are no (or few) ads in between innings on MLBTV streamed games. Eventually, those slots fill up, and MLB won’t need cable anymore. They could even shorten the commercial breaks and make the game faster.

The upheaval won’t be pretty, but I would bet it ends in a better service, more games to watch, and the game as rich as ever. Bring on the disruption!

from baseballmusings.com http://ift.tt/2n0QrSh