(03-07-2017 12:36 AM)Wedge Wrote: Quote:the company is looking to pare tens of millions in staff salary.
And some folks still think that ESPN will pay more for every new pro or college TV rights deal than they paid for the last deal?
My contention is that premium content will continue to receive premium pricing regardless of the format. ESPN can't just let its top sports properties walk away: whatever costs there might be with them, they also HAVE to have them or else they cease to exist entirely (not just make lower profits).
Once again, look at ESPN's sister organizations at Disney in the movie business. Star Wars, Marvel, Pixar and Disney Princess movies still command huge budgets despite the movie business not being as profitable as it was 25 years ago. Big brands still get big money. The cheap movies also still get funded on the low end (such as inexpensive horror flicks like Paranormal Acitivity and Get Out). The movies that got cut, though, are the mid-budget films (think of the 1990s era Miramax films) - those are the ones that are impossible to get made in Hollywood now. (Caveat: Amazon, as shown by Manchester by the Sea this past year, and Netflix might be stepping in to fill that mid-budget void.)
As a result, I really don't believe that the NFL, NBA, MLB and P5 leagues are the ones that need to worry. ESPN needs them and there's heavy competition for all of those properties from the other networks that would like to build their own competitors to ESPN themselves (including the aforementioned Amazon and Netflix and other tech companies) that will keep premium pricing for premium sports brands (just like premium movie brands). If you thought that all of the money in sports is going to just a handful of organizations already, just wait until ESPN basically have to pour all of its resources into just those premium properties with literally nothing else to spare.
The middle tier of sports properties are really who need to worry: G5 conferences, non-major golf and tennis tournaments, MLS soccer, etc. The expensive premium brands are needed to justify ESPN's top line subscription rate, but the mid-tier content isn't worth mid-tier costs. You're either going to see really high value content (the top brands) or really cost effective content (such as WCC basketball with its diet of Gonzaga and BYU games or expanding its 30 for 30 library with documentaries that can do well in repeats and can be shown at any hour of the day). The stuff in between will get squeezed (just like the middle is getting squeezed in all of society - you're either high or low with little in between).
You can even see it with the stories posted here on this thread. The OP story shows that ESPN is preparing for layoffs of talent to save costs. Yet, in this same thread, there's another story that ESPN is preparing to give Mike Greenberg a contract that would make him one of the highest paid people in the industry. The fungible talent is expendable and will get cut, but ESPN will pay higher salaries to the smaller number of people that they believe actually drive viewership (like Greenberg, SVP, etc.). Expect the same thing for sports leagues themselves (just like virtually every other industry over the past two decades).