ESPN LAYOFFS (NYT)
As many already know, ESPN laid off 100 employees, many of which were high-profile personalities. After years of skyrocketing rights fees and people cutting ties with cable companies, ESPN has a cash flow problem. Noble of them to protect employees living paycheck to paycheck, but the impact on broadcast quality could hurt ratings.
ESPN needs to strongly consider alternate revenues streams and reduce its dependence on a declining cable market. In other words, provide direct access to customers outside traditional cable deals. As more customers continue to move away from expensive cable contracts, ESPN can still remain connected with them through a direct service similar to HBO. Currently, WatchESPN requires a cable subscription login.
What About The Fees?
The cost of broadcast rights fees is the cost of doing business at this point. Until the deals expire, ESPN has to honor the terms. Going forward it should take a stronger negotiating position, but now should focus on maximizing revenue to offset the cost. As a sports centric organization, ESPN cannot lose its connections to the content its built around.
Beyond the business aspect, ESPN needs to focus on its core content, setting aside the political commentary and puns. Stop incorporating political attacks and stop promoting stereotypes. Focus on being a true worldwide leader in SPORTS. Companies that forget why they are in business tend to go out of business.