Disney tells ESPN to cut costs as network loses subscribers

ESPN losing subscribers, cutting costs

disney forces espn to cut costs 1024px sportscenter studios 2 — <a href="https://commons.wikimedia.org/wiki/File:SportsCenter_studios_2.jpg">By Rob Poetsch (IMG_8037) [CC BY 2.0 (http://creativecommons.org/licenses/by/2.0)], via Wikimedia Commons</a>

The next time ESPN reports on a sports franchise that’s trying desperately to get under the salary cap, they’ll be able to empathize like never before. While the “worldwide leader in sports” has historically been a cash cow, a changing cable landscape has prompted Disney — the network’s parent company — to slash the sports behemoth’s budget.

Reports indicate that Disney is forcing ESPN to cut $100 million from its 2016 budget and $250 million from its 2017 budget. This news comes on the heels of reports that big names like Keith Olbermann and Bill Simmons are on their way out of town and that Radio Personalities Mike Greenberg & Mike Golic (Mike & Mike) won’t be moving — as planned — from Bristol, CT to Times Square.

Business Insider claims the cost-cutting at ESPN “should make everyone nervous,” from cable providers to the network’s employees, and people are beginning to wonder whether the network is truly in trouble. Unbeknownst to the general public, ESPN has been hemorrhaging subscribers lately, losing 3.2 million subscribers in more than a year, as reported last week by The Wall Street Journal.

In the past, we’ve reported on just how expensive ESPN is vis-a-vis the rest of your cable package, and non-sports fans are increasingly looking for ways to avoid shelling out for programming that they don’t want or need.

On top of that, a new TV deal will nearly triple the cost of the network’s NBA rights, which are expected to shoot up from $485 million annually to $1.47 billion annually come 2016-17.

It’s too early to tell what the practical effect of all this cost-cutting will be, but this year’s college basketball season may have been a harbinger of things to come. This past season, announcers called 47 different games from the studio in Bristol, as the network opted not to pay for their travel expenses.

Despite have a stranglehold on day-to-day sports programming, it looks like ESPN — like most other networks and cable providers — may have to reconcile with the ever-changing realities of today’s media market. We’ll be bringing you further developments in the days/weeks to come.

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