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Post by dex on Feb 10, 2016 9:56:26 GMT -5
PORTS TELEVISION
Drop in subscriber numbers cutting into ESPN’s profits
By Ryan Nakashima The Associated Press
LOS ANGELES — ESPN, the sports network that drives Disney’s profit engine, has hit a soft patch. Subscribers have fallen by about 7.2 million over the last three years, according to Nielsen, resulting in a round of layoffs. As more people cut the cord to watch programming online, its perch on top of the pay TV empire is looking unsteady at best.
The network’s troubles are a bellwether for one of TV’s biggest challenges: the ever-increasing cost of sports rights and whether consumers want to keep footing the bill.
The conundrum was reflected in Disney’s quarterly earnings on Tuesday. Even though “Star Wars: The Force Awakens” helped Disney’s earnings soar 32 percent to a record $2.9 billion, its television profits slumped by six percent, in part due to increases in the cost of sports-broadcast rights. It was Disney’s second profit decline in the TV segment in the last four quarters. Shares fell four percent to $88.40 in after-hours trading, the lowest level in more than a year.
Major media companies have invested $130 billion in sports rights over the next several years, Morgan Stanley analyst Benjamin Swinburne said in a recent investor presentation. But the cost of those rights is increasing faster than the revenue those companies reap.
Leading the pack of big spenders: Disney and its ESPN juggernaut, which accounts for an estimated 29 percent of those
longterm contract rights, from “Monday Night Football” to the NBA playoffs. Should the ad market falter and the pay TV audience decline even faster than its current one percent a year — the “bear case” — Disney’s overall profit growth rate for the next four years could be nearly halved, Swinburne said.
ESPN’s impact at Disney is huge because it leads the cable networks division that accounted for nearly half of Disney’s operating income last year. Sports rights “may ultimately turn into more risk than reward,” Swinburne said.
There are plenty of signs that the cost of broadcasting sports is butting up against consumers’ willingness to pay.
After paying more than $8 billion for the rights to televise Los Angeles Dodgers baseball games in 2013, Time Warner Cable Inc. still hasn’t reached deals with other distributors for the majority of L.A. homes. Distributors don’t think fans will tolerate a price hike even though the dispute is about to drag into a third season.
L a s t f a l l , C o m c a s t dropped the YES Network that is home of New York Yankees baseball and Brooklyn Nets basketball, citing high costs and low viewership.
And CBS announced last week that it would split the cost of broadcasting “Thursday Night Football” games with NBC, in a move that could help CBS trim its losses on the deal by $100 million next season alone, by Swinburne’s reckoning.
All of these events point to trouble for sports rights buyers. These companies agree to pay sports leagues annual increases in multi-year deals, but are now looking at a steady decline in pay TV subscribers. As the biggest buyer of sports rights, ESPN bears much of that risk.
“The tradeoffs being made to get these rights raise the question of how long this trend can be sustained,” Barclays analyst Kannan Venkateshwar wrote in a recent report.
Sporting events may attract large audiences, garner an outsized share of advertising revenues and offer a showcase for promoting other TV shows. But networks such as ESPN still get a large majority of their revenue from fees paid by cable and satellite subscribers. According to SNL Kagan, about 78 percent of ESPN’s $9.5 billion in net operating revenue excluding ad commissions came directly from subscriber fees last year.
That’s why any hint of a decline in subscribers hurts so much. It’s also why Disney stock is down some 26 percent since November.
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pcdad
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Post by pcdad on Feb 10, 2016 11:52:03 GMT -5
my son was telling me he paid an extra $10 a month for Sports programming (ESPN) then an Additional $5 per month to get the local sports teams. While it is necessary for his viewing, many are opting to put cut expenses rather than pay for additional sports programming.
"It's the economy Stupid!"
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Post by dex on Feb 17, 2017 9:04:35 GMT -5
by WARNER TODD HUSTON 15 Feb 2017 1579
SIGN UP FOR OUR NEWSLETTER
Once an indispensable sports powerhouse, cable TV network ESPN has gone from must-see-TV for millions of sports fans to financial boondoggle for owner Disney with the network losing up to 10,000 subscribers a day, a report says.
“A floundering ESPN, with rising costs and declining viewership, continued to sink Disney’s DIS, +0.24% financial results during its fiscal first quarter,” MarketWatch.com reported.
With the impact of the flailing sports network, Disney’s revenue fell 3 percent, and its profits sank 14 percent, the financial site reported.
As to ESPN itself, the network lost subscribers, found its average viewership crater, and experienced falling advertising rates even as its programming costs climbed. And this fall from grace continued even after Disney insisted that ESPN had reached its bottom after the previous quarter came to an end.
Disney CEO Bob Iger, though, is still putting a sunny face on this quarter after quarter failure saying he still “believes” in the network.
“We believe that the best approach to doing well in a world that is disruptive, in a world that has far more digital distribution, is to have great content and tell great stories. And that includes ESPN, by the way,” Iger said during a recent conference call. “But I can tell you that it is our full intent to go out there aggressively with digital offerings direct to the consumer for ESPN and other Disney-branded properties.”
Despite Iger’s happy talk, ESPN has lost about 12 million subscribers, down to 88 million from its 100 million subscriber high from back in 2011. That lost revenue amounts to about $7 per subscriber, according to The Wrap.
ESPN’s operating costs are also negatively impacting its finances, especially the $7.3 billion it has to pay out to the various sports leagues for access to game broadcasting. But, according to at least one analyst, ESPN’s political lurch to the left has also led to its massive loss.
Fox Sports Radio host Clay Travis recently slammed ESPN as the “social justice warrior network” saying, “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…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….Those with liberal opinions are rewarded and allowed to speak freely, those with conservative opinions are told to keep their mouths shut…”
Indeed, even ESPN itself seemed to walk up right to the edge of admitting it has gone too far to the political left with a piece by the network’s ombudsman exploring the problem. A long piece back in November by ESPN ombudsman Jim Brady presents evidence that complaints have resonated, even inside its executive boardroom, that they have become far too liberal.
In his piece, Brady grapples with charges of the network’s emerging and extreme left-wing bias and suggests ways to address that perception. But, Brady spends much time insisting there is no left-wing bias at ESPN even as he argues that the network hasn’t done enough to assure customers and sports fans that the network welcomes all political views.
Unfortunately, even as Brady comes close to admitting that conservatives are quashed and liberals given free reign, he doesn’t quite admit to what millions of fans see with their own eyes.
The experience of former Red Sox pitcher Curt Schilling, though, belies Brady’s claim that ESPN is balanced and allows on-air talent to come to the support of conservative political ideals. Schilling was repeatedly punished by ESPN and eventually fired or his conservative statements.
Others have spoken out about the leftward tilt, too. Ryan Russillo, co-host of ESPN’s “Russillo and Kanell,” recently noted how weary he is of the network’s liberalism, the Inquisitor reported.
“I don’t know what the job is anymore…If I were doing the anti-Trump show three days a week, would I have 90% support from co-workers? Because that’s what it feels like right now,” Russillo said.
Follow Warner Todd Huston on Twitter @warnerthuston or email the author at igcolonel@hotmail.com.
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Post by TheInfoMan on Feb 17, 2017 9:19:54 GMT -5
This piece might more properly deserves to be on the Off Topic board. But I will comment anyways. The quote from Clay Travis above is typical in that in falls into a liberal trap. Ie: to say that ESPN is a "social justice network" suggests that what they are fighting for socially is "just," and IMHO it is not. To a guy like me, Curt Schilling is a social justice warrior and I always try to frame social arguments in that light. Never give ground.
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friar82
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Post by friar82 on Feb 17, 2017 16:39:36 GMT -5
Death by 1,000 cuts...
"The Worldwide Meddler in Sports" is quickly loosing control of its once dominant brand.
Call me stubborn, but I have rarely watched anything on ESPN, since the BigEast shifted to Fox.
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pcdad
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Post by pcdad on Feb 17, 2017 16:46:51 GMT -5
Hardly view it at all. View FS1, Fox, FSN (CBS College Sports), (any games played on MSG or msg2?) for Big East games. Rarely watch ESPN.
Is SportsCenter still a program. Haven't watched the Sports Reporters since Bob Ryan left/retired.
Only so many hours in the day....
and I have miles to go before I sleep...
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Post by connfriar on Feb 17, 2017 16:56:10 GMT -5
I'll watch college or the occasional NBA game...I think their baseball coverage is terrible.
As for football, Jon Gruden is a good listen but many games on Monday Night don't interest me...
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Post by drairf on Feb 17, 2017 17:03:30 GMT -5
When I was at PC we basically had Sports Center on a loop all morning every day. I haven’t watched it in a long time. I already know all the news from the laptop and phone. Not trying to be anti-ESPN, I just don’t have a need for that type of content anymore.
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pcdad
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Post by pcdad on Feb 17, 2017 17:45:44 GMT -5
Visitor Home Points Neutral Court EST Media
Providence @ Creighton 3 21:00 FSNet
Xavier @ Seton Hall 2 19:00 FS1
UCF @ Temple 1 19:00 ESPNU
Louisville @ North Carolina 1 21:00 ESPN
Oklahoma State @ Kansas State 1 21:00 ESPNU
Oregon @ California 1 21:00 ESPN2
Looks like ESPN might have a boost in ratings Wednesday night and perhaps down the stretch of the college basketball season as well when rivalry week and tournaments are played.
Then again, it ain't Monday Night Football viewership (itself on the decline).
Some opine that football viewership was down this season in part because of interest in the presidential campaigns. |
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friar82
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Post by friar82 on Feb 17, 2017 19:26:11 GMT -5
Visitor Home Points Neutral Court EST Media
Providence @ Creighton 3 21:00 FSNet
Xavier @ Seton Hall 2 19:00 FS1
UCF @ Temple 1 19:00 ESPNU
Louisville @ North Carolina 1 21:00 ESPN
Oklahoma State @ Kansas State 1 21:00 ESPNU
Oregon @ California 1 21:00 ESPN2
Looks like ESPN might have a boost in ratings Wednesday night and perhaps down the stretch of the college basketball season as well when rivalry week and tournaments are played.
Then again, it ain't Monday Night Football viewership (itself on the decline).
Some opine that football viewership was down this season in part because of interest in the presidential campaigns. I look at it this way, dad - There are loudmouths out there that would have you think that the sun rises and sets on every broadcast of ESPN... When in reality, it's "identity broadcasting", playing to the elitist mindsets of the "P5", who think that the Neelson Ratings are solely based on the viewing patterns of this discrete subset of the sports viewing populace - as though it's a "blue wall" or something... But alas, there's a silent majority of sports viewers out there, and social media has become their means of consuming sports related content! The elite fat cats at ESPN and the "P5" fanatics would have you think that this "silent majority" is a bunch "deplorables", but their continued infatuation with the "P5" at the expense of the casual spectator (who hates Duke, UNC, Kentucky...) is progressively coming home to roost vote!  Bye the way, did you see what happened at the Siena game last night? |
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pcdad
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Post by pcdad on Feb 17, 2017 19:32:55 GMT -5
Was that the half court shot for $500 and then a bigger prize was accepted?
Does the average fan hate those teams or only know of them and a few others...?
PS - dex commented that Franny was canned at Iowa? He was the Siena coach when my son attended.
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friar82
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Post by friar82 on Feb 17, 2017 19:36:10 GMT -5
Was that the half court shot for $500 and then a bigger prize was accepted? Yep! Great plan, but the poor guy's "moment" was overshadowed by the fact that girlfriend turned fiancé had just hit the half-court shot "attempt" that was intended to simply get her to center court. Funny stuff. Almost as entertaining as Jimmy Patsos! |
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Post by thewalk on Feb 17, 2017 19:36:41 GMT -5
they ain't dropping espn for foxsports so I wouldn't be doing cartwheels over this stuff...I'm afraid it's going to hit home hard on the next deal...
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pcdad
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Post by pcdad on Feb 17, 2017 19:38:21 GMT -5
Loved Patsos firey "discussion" of a few weeks ago and the shaking of the imaginary hands of the opposing team.
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friar82
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Post by friar82 on Feb 17, 2017 19:41:00 GMT -5
Was that the half court shot for $500 and then a bigger prize was accepted? Does the average fan hate those teams or only know of them and a few others...? PS - dex commented that Franny was canned at Iowa? He was the Siena coach when my son attended. Whoa! I didn't hear about Fran. I wonder how Marge is handling it?! Fran will land on his feet with a decent deal... short of his dream job of coaching ND, and perhaps not as much money as the lottery he hit in Iowa - but enough to keep him comfortable for years to come. He can coach... but so could Paul Hewitt who flamed out (which surprised me!) |
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