I know you are, but what am I?

We’ve all seen the potshots taken at ESPN’s business model of late, but what if Mickey’s not exactly wrong about what it’s doing?  From a bottom line standpoint, here is how an 800-pound gorilla thinks:

“You have to build a deeper moat,” he often said when discussing competition. In Skipper’s folksy Southern style, that meant keeping ESPN’s enemies at bay. It meant identifying the rights ESPN wanted — the NFL, NBA, MLB, MLS, college sports, tennis — and paying a dollar more than anyone else to get them.

And while you may think in an era of decline cable subscribers, that’s a dumb strategy, the numbers disagree with you.

Distributors started creating low-cost packages as a retention method to keep their customers from cutting the cord. Many of those packages do not include ESPN, a move that surprised many cable veterans who assumed that the network’s contracts would not allow cable operators to keep ESPN off those packages. Standard cable contracts mandate that channels have to be in a certain percentage of homes — called “minimum penetration thresholds.”

Around 15 years ago, though, ESPN took those clauses out of its deals in exchange for convincing distributors to pay a higher license fee. Several distribution executives describe the move as a good one for ESPN at the time, as it made sure that the channel not only had the highest affiliate fee in the business, but its annual increases were bigger than other channels’ entire fee.

In 2016, for example, distributors paid ESPN $7.24 per subscriber per month, according to Kagan. In 2017, that fee increased to $7.89, an increase of 65 cents. Only 13 channels make more than 65 cents per subscriber per month, including four Disney-owned channels — ESPN, Disney Channel ($1.49), ESPN2 (98 cents) and SEC Network (72 cents).

Even though ESPN’s distribution is smaller, the network still is making more in affiliate revenue thanks to those increases. ESPN executives insist they like that trade-off, and distribution executives even privately agree that the 15-year old arrangement has been good for ESPN.

If the value in a live sports network is the control of live sports, then what Mickey has been doing with the layoffs and its rights bidding makes some sense, despite what such insightful figures like Jason Whitlock and Clay Travis insist otherwise.

One of ESPN’s top executives accused Fox Sports of advocating what he called a false notion that the network operates with a liberal bias.

“The whole narrative is a false one that was seeded and perpetuated primarily by a direct business competitor,” said Burke Magnus, ESPN’s executive vice president of programming and scheduling. “We have no political agenda whatsoever.”

Fox Sports has given voice to many of the accusations of ESPN’s liberal bias. For example, Fox Sports 1’s afternoon studio show co-host, Jason Whitlock, wrote a May 7 editorial for The Wall Street Journal in which he accused ESPN of adhering to a “strict obedience to progressive political correctness.”

Whitlock is a former ESPN employee who spent two stints with the Bristol-based company before leaving for Fox. Fox Sports and The Wall Street Journal share a corporate parent in News Corp.

Another Fox Sports personality who continually questions ESPN’s business model has also taken on the ESPN-as-liberal topic several times. In an April post on his Outkick The Coverage blog, Fox Sports personality Clay Travis wrote, “ESPN made the mistake of trying to make liberal social media losers happy and as a result lost millions of viewers.”

Again, is losing millions of viewers more important to ESPN than maintaining revenues?  That hardly seems likely.

The topper to all this is that the WWL isn’t the only live sports outlet that’s let reporting talent go lately in a search for the right kind of balance as the broadcast world copes with a changing market.

Fox Sports will eliminate about 20 writing and editing positions in Los Angeles and replace them with a similar number of jobs in video production, editing and promotion. Executives told staff in meetings Monday after outlining the new strategy in a memo obtained by Bloomberg. Affected employees will be encouraged to apply for the new posts.

The owner of Fox News and the Fox broadcast network has decided that paying writers to cover sporting events, pen columns or grade teams’ NBA draft moves is best left to ESPN and other news-focused sports sites. Fox is opting to divert those resources into producing online video that complements on-air shows, can be packaged into advertising sales across the web and TV, and has the potential to go viral on social media.

News outlets of all shapes and sizes are making a transition from the written word to video.

Nothing wrong with that; it’s just another indication that the networks are feeling their way around the best way to help the bottom line in a digital, video-based era.  I mean, this is some kind of echo:

… But this is only the culmination of months-long efforts by Horowitz to shift digital’s focus away from covering news and towards promoting FS1’s on-air personalities. In fact, writers sent to the Super Bowl in February were told once they arrived that they wouldn’t be writing for FoxSports.com, but would be ghostwriting copy for on-air talent instead. Digital executives like Pesavento and Mike Foss (both previously For The Win) have been pushed out as well, top writers like Bruce Feldman have been posting pieces on Facebook instead of on Fox’s site, and FoxSports.com has become more and more about what their debate show personalities say on-air…

If both sides are doing it, there’s nothing political about that.  But letting Clay Travis, who’s had a longstanding weak grasp of economic issues, gin up righteous indignation is a great way to attract the rubes, I suppose.  Maybe Travis can get Feldman to ghostwrite some college football pieces for him.

In any event, watch those subscription fees, peeps.  They matter a lot more than Caitlyn Jenner and Curt Schilling.

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17 Comments

Filed under ESPN Is The Devil, Fox Sports Numbs My Brain, It's Just Bidness

17 responses to “I know you are, but what am I?

  1. Gaskilldawg

    I used to read OutKicktheCoverage regularly but as it gained viewship Travis’s ego became more and more insufferable. Also, his content dumbed down to frat boy topics. I rarely click on it now.

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  2. Dawgholio

    Yeah but Clay Travis is a lawyer and married a cheerleader so his opinion matters more.

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  3. DawgPhan

    Lulz at Fox having to lay people off because of their social justice liberal cuck media bias.

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  4. paul

    I only watch ESPN during college football season. However, my brother-in-law works for Disney. Though he didn’t stay at a Holiday Inn Express last night he does complain loudly and often about the extremely liberal internal corporate environment that has taken hold since Disney began acquiring properties such as ABC and ESPN.

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    • DawgPhan

      I am sure we had more than a few complaints at my company when everyone was required to take the 8 hour diversity training.

      how dare those liberal cucks force me to consider being nice to a co-worker.

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  5. Strange that Fox is laying people off what with them totally not being a liberal propaganda rag a la ESPN. It’s almost like that argument is dumb…

    As for Fox “pivoting to digital,” it sucks to hear because what that really means is putting up shitty 60-second clips of their crappy debate programs with a 15 – or 30-second spot in front of it and calling that “digital.”

    I work in the digital media space a bit, and the gap between how advertisers view digital video and how content creators view it is vast. Everyone on the content side knows the “engagement” of viewers is largely bullshit, but advertisers think it’s real and the content creators need the funding so they play along. So what you’re probably going to see out of Fox is more crappy videos and “between the break” clips that don’t ad much of anything but are a nice fit for a pre-roll ad buy.

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  6. Macallanlover

    Burke Magnus doesn’t really think ESPN has a liberal bias? Talk about clueless, he probably thinks MSNBC, NYT, and Washington Post, etc., gibe you the full details as well. It is OK to watch/read things like that if you have the stomach for it but may reflect a reason why you don’t see other realities in your business operation at ESPN.

    I don’t watch enough of ESPN talking heads to say how much worse it has gotten in the last ten years but I regularly hear people bring it up and say they watch less of the reporting/analysis portions of their programming. The major problem is certainly bigger than their getting too political and offending a portion of their base but why would you throw gas on the fire that threatens to burn your house down?

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    • “I don’t watch…”

      “But I regularly hear…”

      It’s become a narrative among the very people who would be angered by said narrative and the amazing part of the narrative is you almost always hear, “I never watch it, but…”

      I don’t know if ESPN is liberal or not because I don’t watch it outside of live sports. I’ve never gotten the impression ESPN is liberal from live telecasts, but then again I’m not looking for a reason to be aggrieved, either. I remember when ESPN put Rush Limbaugh on Countdown, though. Perhaps I missed the conservatives in an uproar of ESPN politicizing back then.

      ESPN wants to ensure people keep paying the $7 and change a month as part of their cable package. They want them to tune in for shows, too, but what matters above all else is they keep a cable package. Until we have proof that people are outright cancelling all of cable because of ESPN’s damn liberal bias (that means cancelling Fox News, FS1, etc…) I have a hard time buying the “liberal ESPN has hurt their own bottom line” argument.

      What’s killing ESPN is the same thing that killed newspapers before it: The Internet. SportsCenter is no longer must-see TV because I can get my highlights on demand whenever I want them. I don’t need to sit through an hour-long show of highlights I don’t care about to get to the one I want.

      Teams have their own sites/media entities that cater to their specific fans. There are also a million blogs (like this one) that provide great content and a sense of community. Each league has its own channel and digital property where they have highlights for every event. The Internet has made SportsCenter irrelevant and it also provide a space for better, more nuanced and thought-out discussion of the day’s events.

      Non-live event programming at ESPN (and FS1 and BeIn Sports, etc…) is made for people who don’t work with access to the Internet all day. It’s my dad, who’s a teacher who comes home and watched PTI or whatever is on. And that group of people is dwindling every day.

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  7. JarvisCrowell

    I don’t believe their liberal bias is a major factor in their bottom line troubles recently. With a little research into how they treat their conservative vs liberal talent though, it’s clear they very much have said bias.

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    • Care to elaborate on how they treat them differently? Bob Lee is probably the most respected man in the company and he’s pretty conservative. I’d be curious (legitimately) to know of instances of different levels of handling conservative vs liberal talent.

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      • JarvisCrowell

        Curt Shilling fired, sage Steele got removed from her program. (it seems she may land somewhere else at ESPN so time will tell whether it’s a demotion or not). Le Batard, and Bomani Jones, are sitting pretty. Aside from that simply watching the tone with which they approach hot topics it’s pretty clear which way they’re leaning.

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  8. Southernlawyer11

    But Clay Travis makes more money than you !
    The sad thing is that on a core level that guy has some talent and insight. I used to forward his articles to my brother-in-law. But the bragging and beating the Kapernick / race / liberal espn / political snowflakes thing into the ground is beyond tiresome. I can’t support it anymore because he is intelligent enough to have (clearly) sat down and made a conscious decision to do nothing but attract the rubes and bleed cheap bucks off of the climate of political sensationalism and continue until he’s picking meat from the bones like a vulture.

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  9. W Cobb Dawg

    Is that the same fox sports that took over most nascar broadcasts when they were at their height of popularity, and then proceeded to run the sport into the ditch from which they’ve never recovered? That fox sports?

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  10. Dawg Vegas

    Meanwhile, it’s full steam ahead for the WWL and the ACC:

    http://m.sportsbusinessdaily.com/Journal/Issues/2017/06/26/Media/ESPN-ACC-Network.aspx?

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