ESPN Loses 621,000 Subscribers; Worst Month In Company History

[Knight Shift]

http://www.outkickthecoverage.com/e...cribers-worst-month-in-company-history-102916
LONG article with lots of info. Here are highlights:

These 621,000 lost subscribers in the past month alone lead to a drop in revenue of over $52 million and continue the alarming subscriber decline at ESPN. Couple these subscriber declines with a 24% drop in Monday Night Football ratings this fall.

Presently ESPN is on the hook for the following yearly sports rights payments: $1.9 billion a year to the NFL for Monday Night Football, $1.47 billion to the NBA, $700 million to Major League Baseball, $608 million for the College Football Playoff, $225 million to the ACC, $190 million to the Big Ten, $120 million to the Big 12, $125 million a year to the PAC 12, and hundreds of millions more to the SEC.

It seems pretty clear that within five years ESPN will be bringing in less subscriber revenue than they've committed for sports rights.

 

[drewbagel423]

Eff em. If they would just stick to reporting and broadcasting sports I might feel differently but they clearly push agendas and teams, and sensationalize stories to fit.

 

[RRRRUUUU]

You guys realize this trend is not good for Rutgers and the big ten right?

 

[ashokan]

As much as I dislike ESPN I get a lot of games from them on ESPN3. I'm not sure I want to cheer their demise. RIght now its easier to get NFL highlights off ESPN than NFL (who makes you watch TWO commercials for one highlight)

 

[Knight Shift]

You guys realize this trend is not good for Rutgers and the big ten right?

Disagree. Nobody wants to pay $8/month for ESPN. Something else will replace it if they go under

 

[PeteGiam07]

this follows up with reports that NFL viewings are dropping big time this year compared to last year. It's a cordcutter world and the non-cordcutters are in denial.

 

[LotusAggressor]

Maybe they can do a 30 for 30: Requiem for ESPN.

 

[Dpgru]

There are other sports networks that will pick up any cutbacks from ESPN. Fox sports, CBS sports, NBC sports are all trying to get their share but they have been locked out by some of the contract language ESPN had with various leagues and sports. ESPN will not be able to remain the king of sports marketing but I do not think the revenue streams will dry up. What is lost from ESPN will be made up from other sources. The ones who might have to worry are the g5 conferences as they may not be in demand as much as the p5 schools.

 

[MADHAT1]

ESPN started cutting some of its higher priced personalities trying to save money.
Wonder if it's going to get rid of some programing as well.

 

[drewbagel423]

Disagree. Nobody wants to pay $8/month for ESPN. Something else will replace it if they go under

I'm honestly surprised the number is that low. I would gladly pay $8/month for the ESPN channels. The problem is paying $50/mo. for all the bundled garbage that comes with it.

 

[Bamm Bamm Rubble]

Those idiots are paying baseball what.....?

 

[jtung230]

Blame it on Kaepernick

 

[RU31trap]

Why all the hate towards ESPN? Did I miss something?

 

[Bamm Bamm Rubble]

Why all the hate towards ESPN? Did I miss something?

WTF?

 

[j10oreo]

Why all the hate towards ESPN? Did I miss something?

found the troll?

 

[ScarletDave]

RU31trap is a troll and needs to be banned. Every single one of his posts is exactly what I would write on the Penn State board if I was trying to stir the pot. That said, that's all I'm saying even if he responds to this before he gets banned.

 

[RUich]

Maybe they need to go back to their roots. Ah, the glory days of Australian Football.

 

[kapyoche]

If you think ESPN is toast then you should short Disney stock since ESPN is the real money maker. I think it makes up 40% of their revenue because it charges $7/month to subscribers.

ESPN is going to lose because of the way people consume sports. Since RU is no longer on ESPN on Thursday nights, I don't watch ESPN that much any more. I should get rid of the ESPN package.

 

[rurichdog]

this follows up with reports that NFL viewings are dropping big time this year compared to last year. It's a cordcutter world and the non-cordcutters are in denial.

I'm sure justin.tv will step up to produce & broadcast the content for y'all if ESPN fails.

 

[RRRRUUUU]

Disagree. Nobody wants to pay $8/month for ESPN. Something else will replace it if they go under

So the end customer doesn't want to pay what they're paying now. How does that not flow through to the big ten?

Also something might replace ESPN, but that also means less competition, which means less $ for the next big ten deal.

 

[krup]

So the end customer doesn't want to pay what they're paying now. How does that not flow through to the big ten?

Also something might replace ESPN, but that also means less competition, which means less $ for the next big ten deal.

ESPN is a huge middleman siphoning off enough profits not only to keep their sports networks, but a huge media conglomerate, going.

What if the something that replaces ESPN is the Big Ten, through the BTN? Then the customer is paying less than they are paying now and the Big Ten is still making lots of money.

 

[NorthNJRUFan]

So... Those of you laughing are glad the Rutgers is going to lose money?


This was a huge gamble that Delaney is taking. To sign a short term contract with them and negotiate again first. But give up long term guaranteed money.

Doesn't mean it's a bad idea. But don't just be blind haters of ESPN when they are going to be the ones either paying the big ten or driving up the cost of the big ten package

 

[RRRRUUUU]

ESPN is a huge middleman siphoning off enough profits not only to keep their sports networks, but a huge media conglomerate, going.

What if the something that replaces ESPN is the Big Ten, through the BTN? Then the customer is paying less than they are paying now and the Big Ten is still making lots of money.

People that love football / college football watch ESPN. People that have allegiance to a team in the big ten watch BTN. How are you going to expand your base if you're only on BTN. There's a reason that a good game on BTN still draws very little compared to a shitty game on ESPN.

 

[RRRRUUUU]

I really don't get the ESPN hate anymore. We're in be Big Ten now so we won despite what ESPN wanted. It's like hating the British for the revolutionary war. We won, we're over it.

 

[rutgersal]

So... Those of you laughing are glad the Rutgers is going to lose money?


This was a huge gamble that Delaney is taking. To sign a short term contract with them and negotiate again first. But give up long term guaranteed money.

Doesn't mean it's a bad idea. But don't just be blind haters of ESPN when they are going to be the ones either paying the big ten or driving up the cost of the big ten package

ESPN is the market makers for sports content. Most of the best big ten games are on ESPN. No ESPN means fewer dollars for RU. bTn is regional whereas ESPN is national. For our sake, ESPN better survive in some incarnation to ensure the big payouts we are all hoping for.

 

[ecojew]

Isn't ESPN pretty much automatically included in whatever basic cable package one purchases? It was on mine, and I put that in past tense, since I became a "cord-cutter" (the word used above that I hadn't heard before) and canceled my Comcast package in July, and switched to Verizon (unfortunately without FIOS being available in my neighborhood, so very slow DSL) without any TV package at all. So I would guess that I am among their 620,000+ lost customers. But I'm finding my evenings much more pleasant without having 20 minutes of ads every hour and don't miss cable TV at all.

ESPiN has created its own mess, IMHO. So it needs to figure out its way out of it. Changing some of their policies toward how they deal with many schools and conferences would help them accomplish this as doing so would restore some semblance of real sports journalism to their offering, which was/is sadly lacking over the past several years. If they refuse to do this, and continue with their current agendas, I don't feel the least bit sorry for them if their hard times continue.

 

[RU31trap]

RU31trap is a troll and needs to be banned. Every single one of his posts is exactly what I would write on the Penn State board if I was trying to stir the pot. That said, that's all I'm saying even if he responds to this before he gets banned.

What exactly have I said to warrent being banned? There seems to be a real hatred towards ESPN that I'm not aware of and honestly at this point in time I really don't care. You could have taken 5 minutes and explained your position regarding ESPN instead you decided to advocate for my expulsion from the site. Not sure if this level of rigidity belongs on a Rutgers site. I'm not saying you should be banned but perhaps put on a short leash by the monitors.

 

[bac2therac]

In the long run its not good for Rutgers...put your petty differences aside. Them losing money will trickle down to all stations and effect all deals

 

[Knight Shift]

Isn't ESPN pretty much automatically included in whatever basic cable package one purchases? It was on mine, and I put that in past tense, since I became a "cord-cutter" (the word used above that I hadn't heard before) and canceled my Comcast package in July, and switched to Verizon (unfortunately without FIOS being available in my neighborhood, so very slow DSL) without any TV package at all. So I would guess that I am among their 620,000+ lost customers. But I'm finding my evenings much more pleasant without having 20 minutes of ads every hour and don't miss cable TV at all.

ESPiN has created its own mess, IMHO. So it needs to figure out its way out of it. Changing some of their policies toward how they deal with many schools and conferences would help them accomplish this as doing so would restore some semblance of real sports journalism to their offering, which was/is sadly lacking over the past several years. If they refuse to do this, and continue with their current agendas, I don't feel the least bit sorry for them if their hard times continue.

This. The $1.47 Billion to the NFL for MNF is idiotic. They have driven away viewers with shedding some of their best on air talent. Meanwhile, one of their most unpopular announcers, Beth Mowins, gets to call more and more games. Not going to sit here and wish for them to survive when they make dumb business decisions and put out an inferior product.

 

[krup]

People that love football / college football watch ESPN. People that have allegiance to a team in the big ten watch BTN. How are you going to expand your base if you're only on BTN. There's a reason that a good game on BTN still draws very little compared to a shitty game on ESPN.

You can't say ESPN is going away and then cite ratings from a time of ESPN's existence as an argument for the future. If the middlemen such as ESPN are removed from the picture what is happening today has no relevance.

To me, the best analogy for sports $$$ is the music business. People like to focus on how nobody buys albums/CDs, etc. anymore so that huge stream of revenue disappeared, and the artists only make a tiny revenue flow from things like Pandora and Spotify. What they ignore is that popular acts are making as much money as ever because of what they control, their live concerts. In the new sports model ESPN and lesser conferences are screwed, just like the record companies and lesser acts were. However, the SEC, B1G, etc. are the Rolling Stones, Springsteen, Taylor Swift etc. who still make a ton of money because they control their popular live content.

 

[rutgersguy1]

Disney/ESPN will have to adjust and adapt just like everyone else in the media/distribution industry as you see in the ATT/Time Warner deal and some others.

I've always said content is their life blood, specifically quality content, and when they lose that they die. I also said I expect sports content in the future to be more fractured. Basically they're going to have a harder time acquiring almost every major sports property out there. Also if ESPN is losing subscribers it's likely most of the others are too, how many subscribers though I don't know.

There will be other players like Fox/NBC/CBS who might step in to a greater degree than they have been and likely partnerships formed like we saw with CBS/Turner and Fox/ESPN. Does that mean sports rights go down? I tend to think no but I wouldn't put it out of the realm of possibility. I do think though that the days of this hyper growth of 200-300% increases during contract renewals are going to be a thing of the past in the future. Quality content will still be treated well but on a relative basis.

I don't know that these numbers take into account any numbers coming from services like Sling TV and the soon to be released DirectTV Now app. I believe ESPN is in Sling TV and will be part of that 100 channel lineup in the DirectTV app. It's probably not nearly enough to offset the losses of traditional cable subscribers but getting into those kind of apps and skinny bundles is going to be key for them. I suppose they could launch a standalone over the top service but I don't know feasible that will be especially considering the fact that I think the sports property content market will be more fractured in the future.

Eventually, I think they'll figure it out to some degree and how to adapt their business model. Also these things eventually trough, but how far a drop and how long it takes who knows. The main thing is for them to hold onto their content and at least until the next round of contracts come around they're okay in that area.

 

[rutgersguy1]

You can't say ESPN is going away and then cite ratings from a time of ESPN's existence as an argument for the future. If the middlemen such as ESPN are removed from the picture what is happening today has no relevance.

To me, the best analogy for sports $$$ is the music business. People like to focus on how nobody buys albums/CDs, etc. anymore so that huge stream of revenue disappeared, and the artists only make a tiny revenue flow from things like Pandora and Spotify. What they ignore is that popular acts are making as much money as ever because of what they control, their live concerts. In the new sports model ESPN and lesser conferences are screwed, just like the record companies and lesser acts were. However, the SEC, B1G, etc. are the Rolling Stones, Springsteen, Taylor Swift etc. who still make a ton of money because they control their popular live content.

ESPN is a middleman but I don't know that these conferences/content generators want to get into the business of producing/broadcasting their own content beyond the what they do now. Yes they own the quality content but I don't know if it's as simple to say they can just produce it themselves and make the same money. ESPN and the major networks reach a wide audience and because of that the content generators are able to get big dollars for their content. Will they be able to do that on their own and get those same dollars from advertisers and subscribers? I'm skeptical. These networks like ESPN are all middlemen but I think they are necessary to some degree. How much will you have to charge per subscriber if you're the BTN or SECN or whomever to make up for the loss of subscribers that match ESPN's huge subscriber base? Could you get into all these skinny bundles? Yes you own the content but IMO it's not easy to build the base that ESPN and the other networks have built.

ESPN needs quality content and without it they die but while I make that statement maybe contrary to that I see the relationship with them as symbiotic rather than parasitic.

 

[krup]

ESPN is a middleman but I don't know that these conferences/content generators want to get into the business of producing/broadcasting their own content beyond the what they do now. Yes they own the quality content but I don't know if it's as simple to say they can just produce it themselves and make the same money. ESPN and the major networks reach a wide audience and because of that the content generators are able to get big dollars for their content. Will they be able to do that on their own and get those same dollars from advertisers and subscribers? I'm skeptical. These networks like ESPN are all middlemen but I think they are necessary to some degree. How much will you have to charge per subscriber if you're the BTN or SECN or whomever to make up for the loss of subscribers that match ESPN's huge subscriber base? Could you get into all these skinny bundles? Yes you own the content but IMO it's not easy to build the base that ESPN and the other networks have built.

ESPN needs quality content and without it they die but while I make that statement maybe contrary to that I see the relationship with them as symbiotic rather than parasitic.

I agree that the conferences would prefer the current model, and that (as someone mentioned above) giving up on sports rights basically means death for some companies so they are going to fight for the current model as long as they can.

My point is that we can look at an industry post disruption like the music business and see that the only people who still make lots of money are the people who control the one thing that cannot be commoditized or replicated, popular live content. The P5 conferences (esp the SEC and B1G) are those people in the CFB world.

 

[mdh2003]

Looking forward to more Australian Rules Football.

 

[rutgersguy1]

I agree that the conferences would prefer the current model, and that (as someone mentioned above) giving up on sports rights basically means death for some companies so they are going to fight for the current model as long as they can.

My point is that we can look at an industry post disruption like the music business and see that the only people who still make lots of money are the people who control the one thing that cannot be commoditized or replicated, popular live content. The P5 conferences (esp the SEC and B1G) are those people in the CFB world.

I agree with that. As I said above, quality content generators (B10/SEC) will be treated well but on a relative basis. I think the best way for them to maximize their dollars is the current model with these "middlemen" like Fox/ESPN, etc...because they have the greatest reach and an established base. Regardless of what the landscape is in the future, I think quality content will be okay but at the same time this hyper growth (200-300%) we've seen in the last decade or so is likely coming to an end. I still expect growth but not at that rate. I wouldn't even put a decline in growth completely out of the picture even though I think that's less likely.

 

[RRRRUUUU]

You can't say ESPN is going away and then cite ratings from a time of ESPN's existence as an argument for the future. If the middlemen such as ESPN are removed from the picture what is happening today has no relevance.

To me, the best analogy for sports $$$ is the music business. People like to focus on how nobody buys albums/CDs, etc. anymore so that huge stream of revenue disappeared, and the artists only make a tiny revenue flow from things like Pandora and Spotify. What they ignore is that popular acts are making as much money as ever because of what they control, their live concerts. In the new sports model ESPN and lesser conferences are screwed, just like the record companies and lesser acts were. However, the SEC, B1G, etc. are the Rolling Stones, Springsteen, Taylor Swift etc. who still make a ton of money because they control their popular live content.

And how does the profit pool of the music industry compare vs what it used to be? To your Rolling Stones point, 23 may be relatively in good shape vs others, but on an absolute basis it means less money. Also I can't think of one industry where you've had large disruption and the transition process wasn't painful.

 

[Steve91562]

Does not bode well for the B12. There may not be the $$ for 5 major conferences. That's how I see it.

 

[Extra Point]

This sounds like a setup to charge consumers more money. If not why don't they do the same thing that every other store does? Offer a sale price good for two years. Then they would gain tons of new subscribers and after two years charge the normal price again.

 

[koleszar]

Eff em. If they would just stick to reporting and broadcasting sports I might feel differently but they clearly push agendas and teams, and sensationalize stories to fit.

You hit it right here. Instead of casting a wide net and showing/reporting about actual sports from a wide variety of areas. They chose to narrow their focus to certain schools and conferences. A lot of their sports talk shows are horrible.

They show a clear agenda to audiences and that audience is now tuning out. Who wants to hear a propaganda show about the SEC and ACC week after week. I'm among them and never thought in my life I would stop watching ESPN. Now I only tune in for live broadcasts.

 

[knightfan7]

Eff em. If they would just stick to reporting and broadcasting sports I might feel differently but they clearly push agendas and teams, and sensationalize stories to fit.

Agenda Example #1....Complete silence on the UNC investigation.