AS THE Worldwide Leader in press releases, ESPN has never been reticent about sending promotional missives. But even to the most grizzled ESPNologist, John Skipper's first-person piece last month for ESPN Front Row—a website run by ESPN p.r. to highlight stories from inside the company—offered a rare glimpse into the company's defensive mind-set at the moment. In an effort to counter the narrative that ESPN has hemorrhaged on-air talent over the past 12 months, Skipper wrote, "While some may leave, ESPN has always continued to thrive and we have a demonstrated track record of the ability to identify and develop talented people." An attachment asserted that the company had retained more than 95% of its talent.
ESPN has significant issues heading forward, but Skipper has a point about the talent exodus. While it's true that Skip Bayless, Colin Cowherd (above, right), Keyshawn Johnson, Keith Olbermann, Curt Schilling, Bill Simmons, Mike Tirico (above, left) and Jason Whitlock, among others, have departed over the past year (Cris Carter, Trent Dilfer, Ray Lewis and Brad Nessler are also likely to go soon), the majority of those exits were of ESPN's choosing. The company wanted to retain Bayless, Cowherd and Tirico, but they all chose to move elsewhere (Fox, Fox and NBC, respectively) for various reasons including larger compensation. That's the more interesting story, because ESPN has rarely lost talent battles. But there are cost limits now.
Far more concerning to Skipper than losing talent is the loss of seven million subscribers (from 99 million households to 92) over the past two years, and the growing number of people opting out of cable. Consumers are also moving into an era of "skinny bundles" in which they still subscribe to cable but pay less and get fewer offerings. (Many of those bundles don't include ESPN.) All this comes on the heels of ESPN's agreeing to enormous rights fees ($1.9 billion per year for the NFL and $1.4 billion for NBA) for long-term deals with sports leagues.
For years ESPN boosted Disney's stock, but last week Disney's second-quarter results missed analysts' estimates, and ESPN's subscriber trends and lower ad revenue received a healthy part of the blame.
On the other side of sports television's Narrow Sea is Fox Sports 1, which has failed to attract large audiences since it launched in August 2013. In what feels like a Hail Mary play, FS1 is rebranding its afternoon programming around opinionated provocateurs—Bayless, Cowherd and Whitlock. The latter two personalities have been announced as cohosts of an hourlong debate show called Speak for Yourself that will compete head-to-head against SportsCenter from 6 to 7 p.m. ET. (The New York Post dubbed it Pardon the Overkill.) At the moment, SportsCenter has a roughly 7-to-1 viewer advantage (about 500,000 to 70,000) over FS1 in that time slot. Highlight shows might be passé in the era of social media, but FS1's plan has the look of a spectacular miscalculation. The last thing the sports world needs is more hot takers.
The challenges ESPN faces are not going away, but the company's profits were up this quarter and it continues to invest in new ventures. This week brings the debut of The Undefeated, a niche site that examines the nexus of sports, race and culture. ESPN is also investing heavily in e-gaming and recently cut a production and distribution deal with Vice Media. Skipper believes his four letters will carry the day. "People want to consume their sports on ESPN," he told Recode in February. "Brand matters. And ESPN is by far the most popular sports brand."
STEPHEN COHEN/GETTY IMAGES (TIRICO)
CINDY ORD/GETTY IMAGES (COWHERD)