- Feb 1, 2017
- 3,924
- 6,825
Disney is desperate to sell ESPN, so desperate they released ESPN’s financials for the first time ever. Profit is plunging & they can’t afford to re-up existing NBA & college football playoff packages & continue to make a profit in years ahead. Yikes:
It’s amazing to me how many sports journalists, and business media, only have the ability to cover what exists now and can’t see what’s coming. Why did ESPN suddenly, after 20+ years, open up their books and share all their financials? Because they want the story to be what’s now and not what’s coming. Disney is trying to cash out ESPN now while they still can, hoping to find a dope buyer. Subscribers are collapsing and content cost is increasing. Just look at what the NBA and the CFB playoff will demand. Even at existing dollars, ESPN can’t afford to retain these packages and be profitable. ESPN is a middle man. The only value it has is carrying sports they rent. So what happens when they can’t bid the most any longer? The business is gone. There are many renters who can pay more. I don’t blame them for trying to sell. But they should have sold five years ago. I’m not sure there are any buyers left.
Streaming isn’t the answer. ESPN+ is losing money in a big way. And when ESPN goes direct to consumer they will destroy the existing bundle, which is more profitable for them. ESPN+ offers no real distribution value over other streaming companies. Every league is going to be desperate to maximize revenue without cable rights payments increasing. If ESPN can’t bid the most, and they can’t, what value does it have in the years ahead? Unless Apple or Amazon is desperate for the rights ESPN has now and wants to buy them, ESPN is finished. Again, this doesn’t require genius analysis, it’s just basic math coupled with a basic understanding of existing sports business. I’ve been writing about this for years, it still stuns me that no one else sees it.
By sharing their numbers publicly ESPN also told every negotiating partner and bidding opponent in sports exactly how much money they have to spend. It’s an incredibly desperate move. So now the streaming companies — and other sports competitors — know exactly what Disney/ESPN can spend and they can bleed them out and/or know exactly what they can bid that ESPN can’t afford to match. I just can’t believe how many in sports don’t see the desperation here.
@ClayTravis
It’s amazing to me how many sports journalists, and business media, only have the ability to cover what exists now and can’t see what’s coming. Why did ESPN suddenly, after 20+ years, open up their books and share all their financials? Because they want the story to be what’s now and not what’s coming. Disney is trying to cash out ESPN now while they still can, hoping to find a dope buyer. Subscribers are collapsing and content cost is increasing. Just look at what the NBA and the CFB playoff will demand. Even at existing dollars, ESPN can’t afford to retain these packages and be profitable. ESPN is a middle man. The only value it has is carrying sports they rent. So what happens when they can’t bid the most any longer? The business is gone. There are many renters who can pay more. I don’t blame them for trying to sell. But they should have sold five years ago. I’m not sure there are any buyers left.
Streaming isn’t the answer. ESPN+ is losing money in a big way. And when ESPN goes direct to consumer they will destroy the existing bundle, which is more profitable for them. ESPN+ offers no real distribution value over other streaming companies. Every league is going to be desperate to maximize revenue without cable rights payments increasing. If ESPN can’t bid the most, and they can’t, what value does it have in the years ahead? Unless Apple or Amazon is desperate for the rights ESPN has now and wants to buy them, ESPN is finished. Again, this doesn’t require genius analysis, it’s just basic math coupled with a basic understanding of existing sports business. I’ve been writing about this for years, it still stuns me that no one else sees it.
By sharing their numbers publicly ESPN also told every negotiating partner and bidding opponent in sports exactly how much money they have to spend. It’s an incredibly desperate move. So now the streaming companies — and other sports competitors — know exactly what Disney/ESPN can spend and they can bleed them out and/or know exactly what they can bid that ESPN can’t afford to match. I just can’t believe how many in sports don’t see the desperation here.
@ClayTravis
