Disney’s ESPN is expected to lay off 100 more employees
Financial pressures on Walt Disney Co.’s ESPN will lead to the layoffs of another 100 employees this year in a further sign of how the sports media giant has been buffeted by changing consumer habits.
The personnel reductions will be across the division, which has 8,000 employees worldwide, according to people familiar with the plans who were not authorized to comment publicly.
ESPN, based in Bristol, Conn., will hire new employees as it continues to build its digital platforms. The company is launching a new streaming service that will give subscribers access to live sports events not shown on the cable channels. ESPN expects to launch the service, called ESPN Plus, in spring 2018.
An ESPN representative did not comment on the planned layoffs, which were first reported by SI.com and CNBC.
The layoffs would be the second round this year for ESPN. About 100 employees, including a number of on-air personalities, were part of a cutback in April.
In late 2015, the company cut about 300 employees and decided not to renew the contracts of some of its high-priced, big-name talent including Colin Cowherd, who went to Fox Sports, and Bill Simmons, who moved to HBO.
ESPN continues to struggle with a shift in consumer behavior, as cable and satellite subscriptions — a major source of revenue for its sports channels — erode.
Long a profit machine for Disney, ESPN has been squeezed by rising sports rights costs at a time when pay-TV revenue has been under threat because of cord-cutting. In 2010, ESPN was available in nearly 100 million homes in the U.S. Now, however, it is in about 87 million homes, according to Nielsen data.
ESPN could once rely on covering the costs of higher rights fees for events such as “NFL Monday Night Football” and NBA basketball by passing them onto pay-TV providers. But consumers have grown resistant to paying high pay-TV bills that include content they do not watch, which has helped spur the cord-cutting trend.
ESPN executives say the revenue from new direct-to-consumer services that carry its channels will begin to offset the losses from pay-TV subscriber declines.
Still, the downward trend — and a string of controversies over ESPN personalities and programming — has put mounting pressure on John Skipper, who has served as president of ESPN since 2012.
During a call with Wall Street analysts, Walt Disney Co. chairman Bob Iger expressed his confidence in ESPN’s future in spite of the challenges it faces over cord-cutting. He says the networks will benefit once viewers of its programming on digital platforms can be measured more accurately and sold to advertisers.
“We’ve never lost our bullishness about ESPN,” Iger said. “The brand is strong. The quality of their programming is strong.”
Twitter: @SteveBattaglio
UPDATES:
4:30 p.m.: This article was updated with additional details from Bob Iger’s conference call with analysts.
2:10 p.m.: This article was updated with additional background on ESPN.
This article was originally published at 1:45 p.m.
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