ESPN’s Death Spiral Will Not Be Halted by Mass Layoffs

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ESPN got rid of nearly 100 on-air and frontline talent in a bloodbath of layoffs that began on Wednesday. It was the biggest sports media story of the year and the end result is that a lot of good journalists are now without jobs.

But the mass firings will do absolutely nothing to stop ESPN’s death spiral.

It is fairly easy to see why the layoffs will not stanch the loss in revenue that began unabated in 2011. ESPN is losing close to $1 billion per year based on subscriber losses. The people who were let go, even if they were compensated on average at $200,000 per year (but they were not, we are just being generous), will help shed about $20 million in payroll. That represents at best a 2 percent savings from the annual losses. It’s a drop in the bucket, and will not change anything systemically or fundamentally from a business model that is now fatally flawed.

John Skipper, who became ESPN’s president on January 1, 2012, when the cable network was at its zenith, utterly failed to anticipate the changing market conditions. ESPN grossly overpaid for its NFL and NBA contracts, each costing north of $1 billion and will not run out until the next decade. There is no new revenue stream that will enable ESPN to make up for the subscriber losses to pay for these contracts without bleeding more money.

But Skipper made the headwinds facing his network into a hurricane by transforming ESPN into a leftist platform that would not “stick to sports.” The “Worldwide Leader in Sports” began its drift into progressive politics in the latter part of the Obama years by promoting gay football player Michael Sam’s unsuccessful attempt to join the NFL, bestowing on Caitlyn Jenner the Arthur Ashe courage award, and backing the social justice agenda pushed by the hard left.

No dissenting opinion was allowed in general. Curt Schilling was unceremoniously dumped for expressing views that were hardly controversial to anyone who is not a committed leftist. It was not OK for Schilling to compare Islamic terrorists to the Nazis, but perfectly acceptable to compare ISIS to the Tea Party, as Tony Kornheiser did.

Kornheiser remains employed by ESPN, as is his equally-liberal co-host Michael Wilbon. And Stephen A. Smith. And all the social justice warriors from Bomani Jones to Rachel Nichols, Michelle Beedle, Kate Fagan, to Sarah Spain. ESPN’s mass layoffs somehow spared all of its most stridently political talking heads, making it clear that Skipper is doubling down on his leftist agenda.

ESPN’s management and apologists consistently claim that the network’s financial troubles have nothing to do with its leftward lurch, insisting that subscriber cord-cutting isn’t ideological. But a number of surveys in recent years have clearly debunked this claim as a vast majority of its viewers expressed their displeasure with the politicization of sports programming. ESPN’s bottom line is being hurt by lower ratings and reduced advertising revenue as sports fans abandon its non-live sports shows in massive numbers.

Ticking off your customer base is never a good idea, whatever business you are in.

So Skipper decided to make a move that was purely window dressing to placate parent company Disney’s antsy shareholders. He shed some of ESPN’s most valuable assets – journalists who actually do their jobs by reporting on sports, with the vast majority of them never wading into politics in any shape or form. This only serves to make a sports fan want to watch ESPN’s programming or visit its website even less.

John Skipper did nothing this week to save his dying network. The best thing he could have done was firing himself.

Follow Samuel Chi on Twitter @ThePlayoffGuru.


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