Uh oh.

http://www.chicagotribune.com/business/b...0316.story

Companies as huge as Disney surely have tons of redundancy, so maybe this is the result of realizing it after acquiring LucasArts and seeing how much ABC Sports has really just turned into the cream of the ESPN crop. Fox Sports is going to cut into their market share, for sure, so maybe they are just bracing for it ahead of time. Hopefully, we all benefit from it by getting higher quality. ESPN should start by letting go of half the talking heads for the NFL alone. The blabber is staggering, but I guess we need 8 guys on site at the same time to fully explain the minutiae of "THE National Football League".

ESPN cutting staff as Fox Sports 1 is about to go on the air? One thing they could do is cut the bloviating that goes on "First Take."

Maybe they should return to just reporting the news instead of trying to become the news.

They're tossing older higher paids to take on some low pay college grads. It's just America in progress.

(05-21-2013 02:27 PM)ark30inf Wrote:  They're tossing older higher paids to take on some low pay college grads. It's just America in progress.

They could do that with most of their top mouthbreathers and save some serious cash.

Did you hear that? Is that sound of the tv rights bubble beginning to burst? Probably not yet. But the bubble will burst I predict around 2018. The Big Ten will get the last Big contract in 2016 and then tv rights will flatten out or even decline.

(05-21-2013 02:46 PM)goofus Wrote:  Did you hear that? Is that sound of the tv rights bubble beginning to burst? Probably not yet. But the bubble will burst I predict around 2018. The Big Ten will get the last Big contract in 2016 and then tv rights will flatten out or even decline.

Sounds about right.

(05-21-2013 02:46 PM)goofus Wrote:  Did you hear that? Is that sound of the tv rights bubble beginning to burst? Probably not yet. But the bubble will burst I predict around 2018. The Big Ten will get the last Big contract in 2016 and then tv rights will flatten out or even decline.

Decline?

So in 12 years even with inflation the contracts will be smaller? I guess people are going to stop watching sports in that time and advertisers will no longer care about the 18-34 male demographic.

(05-21-2013 02:51 PM)NIU007 Wrote:  

(05-21-2013 02:46 PM)goofus Wrote:  Did you hear that? Is that sound of the tv rights bubble beginning to burst? Probably not yet. But the bubble will burst I predict around 2018. The Big Ten will get the last Big contract in 2016 and then tv rights will flatten out or even decline.

Sounds about right.

It has to flatten out. Cord-cutters are putting pressure on the cable and satellite companies, they can't keep adding another $2/month to every home's bill every time they re-negotiate with Disney/ESPN or Fox or Viacom or whomever. The monthly bills need to flatten out now, or the number of cord-cutters will increase quickly.

(05-21-2013 03:18 PM)Wedge Wrote:  

(05-21-2013 02:51 PM)NIU007 Wrote:  

(05-21-2013 02:46 PM)goofus Wrote:  Did you hear that? Is that sound of the tv rights bubble beginning to burst? Probably not yet. But the bubble will burst I predict around 2018. The Big Ten will get the last Big contract in 2016 and then tv rights will flatten out or even decline.

Sounds about right.

It has to flatten out. Cord-cutters are putting pressure on the cable and satellite companies, they can't keep adding another $2/month to every home's bill every time they re-negotiate with Disney/ESPN or Fox or Viacom or whomever. The monthly bills need to flatten out now, or the number of cord-cutters will increase quickly.

The problem with that is more and more things are going exclusively to cable. Next year the final 4 round will be on cable. Eventually the title game will be on cable. Wouldn't be shocked if the NBA goes all cable for the finals in their next deal.

Just cause they're cutting costs doesn't mean they're worried about revenues. They pay talent a lot of money, many of whom could be replaced with much lower cost folks. I recall from the firings of both Harold Reynolds and Steve Phillips that both were making well in excess of $1 million per year when fired. Think of the number of folks at ESPN on the same tier with those two. Meanwhile, the Red Sox fired Heidi Watney for making $100k. There has to be a fair number talking heads that don't add ratings points above those that a generic replacement would bring (i.e., VORP = 0). If so, they have a pretty good opportunity to increase profits by culling some of the herd.

(05-21-2013 03:20 PM)stever20 Wrote:  

(05-21-2013 03:18 PM)Wedge Wrote:  

(05-21-2013 02:51 PM)NIU007 Wrote:  

(05-21-2013 02:46 PM)goofus Wrote:  Did you hear that? Is that sound of the tv rights bubble beginning to burst? Probably not yet. But the bubble will burst I predict around 2018. The Big Ten will get the last Big contract in 2016 and then tv rights will flatten out or even decline.

Sounds about right.

It has to flatten out. Cord-cutters are putting pressure on the cable and satellite companies, they can't keep adding another $2/month to every home's bill every time they re-negotiate with Disney/ESPN or Fox or Viacom or whomever. The monthly bills need to flatten out now, or the number of cord-cutters will increase quickly.

The problem with that is more and more things are going exclusively to cable. Next year the final 4 round will be on cable. Eventually the title game will be on cable. Wouldn't be shocked if the NBA goes all cable for the finals in their next deal.

I don't believe that it will go exclusive to cable as TV starts shifting more towards streaming on smart TVs.

The layoffs at ESPN are a non-story. They spent a TON of $$ this year to re-up existing agreements and snag some additional properties. Since the agreements were signed this year they have to be booked this year. That means a reduction in head count to balance the books and keep Disney (and, more importantly, Disney investors) happy. As I've moved forward in my career, by far the biggest eye-opener to me has been learning that the vast majority of downsizing efforts are dictated not by how well/poorly the company is doing but to balance the necessary accounting for a unique, seemingly unrelated transaction.

(05-21-2013 02:46 PM)goofus Wrote:  Did you hear that? Is that sound of the tv rights bubble beginning to burst? Probably not yet. But the bubble will burst I predict around 2018. The Big Ten will get the last Big contract in 2016 and then tv rights will flatten out or even decline.

Nope... ESPN was still Disney's biggest _moneymaker_, so the TV contract money isn't going anywhere. They simply weren't making 'enough' for Disney, so they cut some overhead.

But at some point, the madness has to end, especially as the internet becomes more of a viable option to watch sports and TV in general on.

(05-21-2013 03:18 PM)Wedge Wrote:  

(05-21-2013 02:51 PM)NIU007 Wrote:  

(05-21-2013 02:46 PM)goofus Wrote:  Did you hear that? Is that sound of the tv rights bubble beginning to burst? Probably not yet. But the bubble will burst I predict around 2018. The Big Ten will get the last Big contract in 2016 and then tv rights will flatten out or even decline.

Sounds about right.

It has to flatten out. Cord-cutters are putting pressure on the cable and satellite companies, they can't keep adding another $2/month to every home's bill every time they re-negotiate with Disney/ESPN or Fox or Viacom or whomever. The monthly bills need to flatten out now, or the number of cord-cutters will increase quickly.

I tend to agree with you Wedge, but with one caveat. The communications industry goes up on rates often because the government sees their fees as a hidden cash cow and what started a couple of decades ago as a .99 cents phone charge has turned into about $14 bucks worth of what are essentially taxes charged across the average bundle. Like gasoline prices in most states the hidden taxes are ridiculous. If our founding fathers had been taxed the % that we are today they wouldn't have stopped with the tea in Boston Harbor.

As to ESPN laying off staff, I agree with many of the posts here. Only I would trim 1/2 of the ex-jocks and all of the PC hires that know nothing about the sports they cover. That's not to say that they should ignore diversity, but just to say when you make a hire make sure they know something about sports and have at least played them at some level. In other words they need to know enough to know when their cue cards and teleprompters are wrong.

Times are changing at ESPN. Yes they are worried

http://finance.yahoo.com/news/espn-layof...54714.html

(05-23-2013 09:47 AM)billings Wrote:  Times are changing at ESPN. Yes they are worried

http://finance.yahoo.com/news/espn-layof...54714.html

Ouch:

"But the rumored reason behind the layoffs — the soaring cost of broadcast rights eating into the company's profit margin — is a real concern for the future of the company.

ESPN is such a monolith because it charges the highest subscription fees on cable, in addition to ad revenue. It can justify those subscription rates because it controls a massive chunk of live sports broadcasting rights — a finite commodity that is getting more and more valuable as TV audiences for other types of programming continue to fragment into smaller groups.

The broadcast rights to live sports are going up for two reasons: 1) live sports is the only thing you have to watch live in the DVR era, and 2) the rise of NBC Sports, CBS Sports Network, and Fox Sports 1 has made bidding more competitive.

In the last 24 months, ESPN has agreed to huge rights deals with a bunch of leagues and events. Some of the highlights:

•$15.2 billion over 10 years for Monday Night football (73% higher annually than the previous deal).

•$7.3 billion over 12 years for the new college football playoff (480% higher annually than what it was previously paying for BCS bowls)."

This means it should be easier for ESPN to buy up all the rights from companies in order to actually create an ACC Network right?