Trump Effect Spells DOOM for ESPN and NFL
Update: ESPN lays of 150 people:
Most of the affected jobs are in studio production, digital content and technology, ESPN President John Skipper told staff on Wednesday.
“We appreciate their contributions, and will assist them as much as possible in this difficult moment with severance, a 2017 bonus, the continuation of health benefits and outplacement services,” Skipper said in a memo posted online by the network.
The cuts amount to about 2% of ESPN’s workforce.
The boogeyman in the room for much of Hollywood has been the way cable TV is priced.
All cable providers “package” their offerings, leaving the consumer with the waste products. So for example if you buy a grab bag of jelly beans, invariably the black jelly beans remain in the bag at the end. Nobody wants them. Moreover, the manufacturers know this.
So why do they make them?
Because some weird sick few actually like them. Put in TV terms, there are freaks who like obscure channels like LOGO (a channel that features Lesbian subject matter). Who knew Lesbians needed their own channel? I thought they could enjoy a good love story, even if it involves a non-Lesbian?
As Rolling Stone opined,
There is a direct correlation between the sheer number of outlets in 2017 and the willingness for companies willing to let creative types travel to the outer limits in order to stand out. As Daniel Fienberg, TV critic for The Hollywood Reporter, notes, “Streaming and the overall expanded marketplace for scripted television have created something of an arms race when it comes to securing the talents of the handful of hot showrunners or creative talents. And in the process of attempting to secure these writer-producers (who are also increasingly directors), it’s necessary to give them the keys to the car. We’re seeing an awful lot of free rein – and these shows are how the Noah Hawleys and Damon Lindelofs and David Lynchs manifest freedom.”
Thanks to premium-cable channels and original-content providers like Netflix, the traditional restraints of network TV have become outdated and the model for what’s considered a success on TV has changed. The latter’s ability to help unique shows like The OA and Sense8 find receptive audiences has rippled through their competition – now everyone wants to be the network/channel/service that’s got the hot new show everyone is talking about. Streaming services don’t need to worry about ratings (Netflix does not make its viewer numbers for their shows public) so long as subscribers keep coming in, while cable networks are taking into account time-shifted viewing more and more. Couple that with less concern about low numbers even from ad-supported TV, and Hawley equates it to having “a lot more rope with which to hang ourselves.”
And with the proliferation of channels comes the proliferation of content. The 24/7 cycle has networks scrambling to fill. Such is the case with ESPN.
The movie Dodgeball lampooned the network, where the writers created ESPN 8: The Ocho. ESPN has been able to experiment on nonsense like this, because of the old model of cable.
“If it’s almost a sport, we’ve got it here!”
In an effort to placate all sports fanatics, ESPN has gone overboard. And their deal with NFL may be the straw that broke the camel’s back.
It’s not outlandish to entertain a previously unthinkable prospect: Might ESPN elect to go without rights to NFL games?
In a span of less than five years, industry giant ESPN has seen its narrative transformed from that of a mighty colossus into the hard-luck tale of a ragtag warrior.
As it struggles to regain heretofore heroic heights — levels of growth that are probably no longer attainable — ESPN has had to endure a slew of significant workforce layoffs (with more reportedly on the way) and a once-doting Wall Street that has turned a skeptically cold shoulder. Astonishing increases in earnings, previously viewed as faits accomplis, now seem like fantasies from another world, thanks to the now-familiar combo of cord-cutting and burgeoning rights fees.
With so much of ESPN’s universe asunder, it’s not outlandish now to entertain a previously unthinkable prospect: Might ESPN elect to go without rights to NFL games after the expiration of its eight-year deal for Monday Night Football in 2021?!
“Impossible”? Yeah, we know — NFL games have been the backbone of ESPN’s existence since 1987, and the biggest, most critical element of its financial dominance ever since. The network basically can’t exist without an NFL rights package.
The article delves into the numbers, and you can see how the NFL used to fund all that black licorice.
These days however, the NFL itself may have become the unwanted candy left in the bag.
First, quietly, ESPN has been able to pull off a dramatic judo move in recent agreements with its affiliates, one whose importance cannot be overstated: There is no longer specific contract language that requires the cable giant to have NFL games in order to earn its lofty (and industry-envied) subscriber fees, currently more than $7 per household. This means the network would not face automatic decreases in that vital artery of its dual revenue stream. Sure, distributors would be aghast, demanding to negotiate lower fees probably immediately, but the point is, there would be negotiations, enabling ESPN to do everything it could to keep those numbers as high as possible.
Second, when ESPN agreed to pay $15.2 billion for its current Monday Night Football deal, some of its key executives believed they were buying the schedule of the previous MNF package, i.e., more often than not, the best game or at least one of the top games of the week. But Sunday Night Football got that pedigree, and Fox and CBS games since then have also generally been more desirable than ESPN’s matchups. With the advent of Thursday Night Football several years ago, ESPN’s Monday night schedule has been further diluted of quality matchups, and the network hasn’t been shy about voicing dissatisfaction.
There are other factors you can read here.
But put simply, the NFL is no longer the draw it once was.
Further, TV evolved from the old model, and is about to evolve even more dramatically. If the league and ESPN don’t get their act together, they will find themselves defunct, as consumers move on.
As for President Trump, he accidentally brought to light things about the NFL and ESPN that they already foresaw.
Business, capitalism is under attack. Leftism eats away at business daily.
The president seems to have an uncanny knack for revealing the dirty truth behind things. Hillary Clinton, Barack Obama, the DNC, the Democrats, and Hollywood can certainly confirm this.
In TV, no longer must you have a superior product to win. Years ago, Leftists “unionized” TV, so that lesser products could survive. LOGO couldn’t stand on its own, and neither could most of the channels–almost all with Leftists views. Even channels like National Geographic bombard viewers with Leftism.
President Trump forced ESPN to look into its crystal ball. If they are smart, they will see the future and heed the warning.