Ready for some college football today, Twitchy readers? Well, you may have to search for a new provider before too much longer. On Friday, Clay Travis and Outkick reported on the first-ever release (under Disney) for ESPN financials and, whoa nelly, it is not a pretty picture.
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: https://t.co/it5rCWUXqn
— Clay Travis (@ClayTravis) October 20, 2023
The company reported that profits for the sports segment — a bundle of ESPN, ESPN television channels, and ESPN+ — declined 20% in the first nine months of the fiscal year, down to o $1.48 billion.
Sales also decreased 1.3% to $13.2 billion.
Yikes.
Travis continued in a thread to explain some of the potentially fatal flaws at ESPN.
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…
— Clay Travis (@ClayTravis) October 20, 2023
The full tweet has more detail:
...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.
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Travis continues.
Steaming 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…
— Clay Travis (@ClayTravis) October 20, 2023
...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…
— Clay Travis (@ClayTravis) October 20, 2023
Travis' final tweet concludes, 'I just can’t believe how many in sports don’t see the desperation here.'
Travis confines his comments strictly to the business side of things at ESPN, which is bleak enough all by itself, but there is another elephant in the room that plenty of people on Twitter noticed.
Part of ESPN's decline is the fact that they put a dumb political scope on everything. Every opinion show is a DEI shitshow. All the real talent left for other networks because of a toxic work culture.
— charlie🌋 (@bbqchucken) October 20, 2023
One episode of MNF costs more than an entire season of GOT to produce. https://t.co/YsM5lyGY8l
More scolding about RRRRRRRRRACISM should do the trick! https://t.co/MucAL5J3iu
— Benny Johnson (@bennyjohnson) October 20, 2023
@espn is unwatchable outside of actual games. Pundits yapping about themselves and other pundits is terrible programming.
— Paul (@Pk135j) October 20, 2023
It's difficult to overstate how much ESPN has turned off regular sports viewers because of the woke political agenda they insert into every show. Add to that the number of people who have turned away from leagues like the NBA completely because of the politics involved, and it doesn't look like a very bright future for ESPN, with or without Disney.
There will be entire business courses on how Disney and ESPN fumbled this bag so hard. Turns out telling 50% of the country that they hate you, it's not good for business. RIP bozos. https://t.co/XrmgrKu56d
— Y◎K◎ // (@Y0K0S0N) October 20, 2023
ESPN is not likely to collapse in the near future, it is still a behemoth, but that's Travis' point. Everyone is focused on where ESPN is now, not on what might (and likely will) happen five or ten years from now, and after current contracts expire.
Twitter didn't seem terribly upset about this long-term outlook.
How unfortunate. 🤣🤣🤣🤣 https://t.co/AgGbPr5Ux0 pic.twitter.com/tvUJIHJmhd
— ♞Paladin♞ (@Glorfindel1951) October 21, 2023
I have been saying NBA was gonna be dead once tv contracts expire nobody watches it. https://t.co/KfHjoPSkzI
— Skyler Hamilton (@skyler0103) October 20, 2023
Finally some good news https://t.co/Lfx6CgqroI
— Whatevs (@j035ich5pach) October 20, 2023
Don't look for ESPN (or Disney) to do any self-reflection about the cause of their problems anytime soon. Like so many corporations, they have buried themselves in deep with ESG and DEI, and there's no easy extrication from that entanglement. Not without bold leadership anyway, and we're not seeing much of that from either company.
— The Grateful Red (@gratefulred1) October 20, 2023
The sad thing is, it IS a shame. Sports have the ability to bring people together, be inspirational, and show us the best in us, not to mention just give us quality entertainment.
But when ESPN, the leagues themselves, and even many of the athletes neglected that and focused either on woke politics, short-term strategies, themselves, or all of the above, they lost the plot. And fans are reminding them by leaving in droves.
This writer hopes that we are always able to watch the best athletes compete at the highest levels. Sports are a beautiful thing. But it will take some re-focusing of these networks and leagues on what fans love, not what they hate.
We're not super confident that will happen, unfortunately.
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