ESPN Profit Plummets As Network Turns Left
Yesterday afternoon Disney announced its quarterly earnings and something I've been predicting for several years now was at the forefront of most of those stories -- ESPN's income declined 11% compared to last year. The drag on earnings and revenue from ESPN led to a quarterly miss of estimates for ESPN's parent company, Disney. Fortunately for Disney the company has made smart strategic moves in other arenas -- buying Pixar, Star Wars, and Marvel among others -- that have helped to defray the coming collapse of ESPN. So while Disney may not suffer terrible consequences thanks to the success of the Star Wars, Marvel and Pixar films and the continuing popularity of its theme parks -- I'll be spending a ton of money there next week on "vacation"with my kids -- ESPN is a dead company walking.
And the story here is simple -- ESPN is losing millions of subscribers and viewers that add up to billions of dollars a year in losses and is on the hook for tens of billions of dollars in sports rights costs in the years ahead.
That's a bad combination.
Every single day this year ESPN has lost roughly 10,000 cable and satellite subscribers.
Per day!
Think about that for a minute. If your business was losing 10,000 customers every single day how panicked would you be? But that's the exact case with ESPN. Every single day the equivalent of a decent sized American town stops paying ESPN for content. This is the continuation of a trend that began in 2011 when ESPN peaked with 101 million cable and satellite subscribers according to Nielsen. Per Nielsen's most recent estimates ESPN now has 87,859,000 cable and satellite subscribers. That's a loss of over 13 million cable and satellite subscribers in the past several years, costing ESPN in the neighborhood of $1.3 billion dollars per year. ($7.30 a month in affiliate fees x 12 months x 13 million households). That's money that will never return and that's money that is incredibly significant when you consider that ESPN is on the hook for $7.3 billion in yearly sports rights fees, the most any company in the world is paying for content.
Presently ESPN has the following yearly sports rights payments: $1.9 billion a year to the NFL for Monday Night Football plus an additional playoff game which costs the network an additional $100 million, $1.47 billion to the NBA, a deal I told you flat out wasn't sustainable back in July because it meant every single cable and satellite subscriber in the country was paying an average of $30 a year for the NBA whether they watched or not, $700 million to Major League Baseball, $608 million for the College Football Playoff, $225 million to the ACC, $190 million to the Big Ten, $120 million to the Big 12, $125 million a year to the PAC 12, and hundreds of millions more to the SEC.
Add it all up and the amounts are staggering, tens of billions of dollars in yearly fees owed regardless of what revenue looks like. With most companies you can cut costs if your revenue declines. Not ESPN. It owes these tens of billions for the next decade to come and more.
The result of this coming financial calamity has been panic, which has primarily manifested itself in a desperate ploy for relevance. ESPN decided to become a social justice warrior network, treating all liberal opinion makers as those worthy of promotion and casting aside all those who had the gall to challenge the new Disney world order.
ESPN became MSESPN.
You would be astounded by how many people inside ESPN I hear from who have the absolute gall to vote Republican. Yes, they exist. And yes they are terrified of you knowing who they are. In fact, many of them are reading this right now and nodding their heads at the absurdity of this corporate decision.
I'm not saying that ESPN should just stick to sports, but I am saying that if you decide to allow political opinions to flourish from your network's stars that you shouldn't neuter all conservative opinion and allow liberal political opinion to advance unchecked. That's not a marketplace of ideas, that's a totalitarian government. Those with liberal opinions are rewarded and allowed to speak freely, those with conservative opinions are told to keep their mouths shut.
Conservative viewers aren't stupid, they see exactly what's happening.
Even crazier, SPORTS VIEWERS ARE, ON AVERAGE, CONSERVATIVE!
Check out this graphic.
The only sports fans with a large fan base in this country that skew liberal in their voting are NBA fans. And that's because of black voters who, guess what, are actually more socially conservative and religious than many white voters. As business plans go ESPN going all in on liberal sports fans is the rough equivalent of Outkick saying that henceforth we will only write articles about hot girls in Saudi Arabia.
Plus, and this is what's really crazy, it's not that hard to be right smack dab in the middle on political issues as it relates to sports. That's exactly where Outkick is. And, guess what, people reward me for that. I'm not an ideologue, I look at facts instead of feelings and treat all people the exact same -- I'm an asshole to everyone regardless of their race, gender, religion or ethnicity, I don't know how much fairer I can be.
The first time I noticed ESPN's new liberal slant was when the network decided to give an ESPY for courage to Caitlyn Jenner for making the decision to become a woman. Look, I'm all for people pursuing their own individual happiness, but there was nothing courageous about Jenner's decision. To me true courage requires an individual risk either life or liberty. Jenner risked neither.
And, remarkably, just about everyone in sports media was afraid to point out how transparently about ratings this decision was. Hell, they even moved the ESPYS to ABC SO MORE PEOPLE COULD SEE HOW INCLUSIVE ESPN WAS.
It was a blatant attempt to gain viewers for the network.
And that was the jumping off point, the moment ESPN ceased to be about sports and became a mouthpiece of the farthest left reaches of the Democratic party. I'm all for political discussion, but when you ally yourself with one political party and your business ostensibly is to talk about sports, you lose viewers who see what you're doing. That's why I call ESPN MSESPN now, the network is desperate to prop up its ratings and has decided that becoming a shill for the left wing in the country is its best option. Sadly, this is just going to lose more viewers.
Not surprisingly, ESPN's ratings are tanking. Ratings for opinion shows the Monday after the Super Bowl this year, a day that is generally one of the most viewed in the country, were down a whopping 33% on average for PTI, Around the Horn, SportsCenter and others.
Turns out that alienating a large segment of your audience is bad for business.
People still tune into ESPN for the games, but even that's dwindling. This year the signature property for ESPN, Monday Night Football, came close to posting its lowest all-time rating. Worst of all, ESPN is retrenching, tossing ESPN2 on the scrap heap of oblivion and concentrating all original programming content on ESPN in an effort to avoid ESPN tanking as well. First Take, the new SportsCenter show at six, and more are all moving to ESPN. Companies that are confident about the future don't retreat, they advance. ESPN is curling up into the fetal position, a triggered, microaggressed liberal lashing out at the world around it -- how dare you say something nice about Donald Trump!
And for what gain?
So a few more left wing losers on Twitter sing your praises without actually watching your shows? ESPN has become Deadspin. Congrats. That just means Ted Cruz is going to murder you in the near future too.
It used to be that sports was an escape from the real world. Now, increasingly, ESPN has made sports and politics inextricably intertwined. How else to explain the network's fixation on Tom Brady's friendship with Donald Trump? Did any athlete have to explain his or her friendship with Barack Obama? I don't recall it.
But of course you wouldn't recall it.
Because rather than explain that friendship every athlete was praised to the high heavens for being friends with Obama.
How else to explain the lionization of Colin Kaepernick for taking a knee during the national anthem or the Missouri protesters for their fake protest that has nearly killed the university? How else to explain the continued coverage of each athlete who doesn't visit the White House or the every critical word of the king of triggered millenials, LeBron James? How about the villainization of Peyton Manning for a twenty year old mooning, Ryan Lochte for peeing outside, and Grayson Allen for having the absolute gall to trip someone during a basketball game?
ESPN is so desperate for white guys to behave badly that they treated Manning, Lochte, and Allen like the white horsemen of the apocalypse. How dare these guys moon, pee, and trip?!
MSESPN's agenda is transparent to anyone with a pulse, the creation of a left wing sports network.
It's all a calculated move, but it's not a decision made out of strength, it's made out of weakness, the equivalent of a dead cat bouncing when it falls off a roof. The desperate final rantings of a dying business.
Like Blackberry, only without the Canadians.
ESPN realizes its business is broken and it's desperately floundering for a successful strategy. Only that strategy, becoming a left wing network, is actually hastening its own demise. ESPN becoming MSESPN isn't a strategy that will save the network, it's just a method of choosing its own execution -- death by extreme left wing liberalism.
At least ESPN will have company there -- say hello to your new sports fan base -- Hillary Clinton and Bernie Sanders.