Exactly seven months after ESPN cut more than 100 employees, the sports network is making another round of cuts, this one bigger. ESPN is letting go of 150 people beginning on Wednesday, Yahoo Finance has learned.
This is a significantly larger number than initially reported by other outlets in the past few weeks. But it amounts to less than 2% of ESPN’s 8,000 employees.
The last round of cuts, in April, affected almost entirely on-air personalities — people recognizable to television viewers and radio listeners.
This time, none of the people getting cut are on-air talent. Instead, these layoffs will affect behind-the-scenes people in a wide range of departments, particularly studio production, digital content, and technology.
ESPN is looking to cut about $100 million in costs, though that savings will come from a combination of staff cuts and other business changes. A little more than half of the 150 people are based at headquarters in Bristol, Conn.
In a terse memo to ESPN employees posted Wednesday morning, ESPN president John Skipper said that the 150 cuts, “generally reflect decisions to do less in certain instances and re-direct resources.” Skipper, whom ESPN renewed this month through 2021, noted that the laid-off employees will still receive their 2017 bonuses.
Losing cable subscribers
It is no secret that Americans are canceling their cable packages in record numbers, opting in many cases to pay for one of the many standalone services like AT&T’s DirecTV Now, Dish Network’s SlingTV, Sony PlayStation Vue, Netflix, Hulu, Amazon Prime, or all the above. Premium, original streaming series are providing compelling alternatives to network television, and cable networks are all getting hit hard.
ESPN says its primetime ratings are actually up 2% this year.
Nonetheless, in the month of November alone, ESPN lost 100,000 subscribers, according to Sports TV Ratings using Nielsen data, while its Fox competitor FS1 lost 199,000. This trend is hitting all the endemic cable sports networks, not just ESPN, and it doesn’t show signs of slowing.
As recently as 2011, ESPN was in 100 million households. It’s now in fewer than 87 million. At the same time, it’s paying higher fees than ever before to leagues like the NBA for the right to show live games. As a result of that bad formula: layoffs.
These cuts come six months after ESPN announced big changes to its flagship news brand, SportsCenter, including shifting its anchor roster and launching new digital-first live updates called SportsCenter Right Now that run on both ESPN and ABC. SportsCenter has had to adapt to a time in which sports fans can find replay clips online and don’t feel the need to watch a full highlight show every night.
“People don’t watch sports news on TV when highlights are on your phone 24/7,” BTIG analyst Rich Greenfield told Yahoo Finance. “People don’t need SportsCenter like they used to.”
New shows, new streaming service
Even as ESPN cuts 150, it is also hiring for a number of positions. The network is also launching a number of new shows and products.
In the spring, the network will open a new television studio in Manhattan’s South Street Seaport, its first Manhattan studio, to serve as the home of two new programs: “Get Up,” a weekday morning show hosted by Mike Greenberg, Michelle Beadle, and Jalen Rose, and a to-be-named afternoon show hosted by Bomani Jones and Pablo Torre.
Disney CEO Bob Iger also announced this month, on a company earnings call, that ESPN will launch a subscription streaming service, ESPN Plus, in spring 2018. The product will mostly offer live sports; it will not be an OTT version of everything that airs on the cable network, a la HBO Go.
ESPN is also relaunching the main ESPN mobile app, and in 2019 will launch the ACC Network.
Recent political noise
ESPN has had a run of political kerfuffles this year, amidst a narrative, fueled by President Donald Trump, that the network has a liberal bias.
In August, ESPN pulled an announcer named Robert Lee off of calling a Sept. 2 University of Virginia football game, an effort to prevent mocking social media posts about the coincidence of his name. The network was roundly criticized for a perceived overreaction. In September, SportsCenter anchor Jemele Hill called Trump a “white supremacist” in a tweet; White House press secretary Sarah Huckabee Sanders called it a “fireable offense” and President Trump tweeted: “ESPN is paying a really big price for its politics (and bad programming). People are dumping it in RECORD numbers. Apologize for untruth!” Hill was not suspended for the Trump tweet, but was suspended the next month for a tweet appearing to encourage fans to boycott Dallas Cowboys sponsors, some of which are also ESPN sponsors. In October, ESPN announced it would air a late-night show on ESPN2, “Barstool Van Talk,” hosted by two personalities from the controversial sports blog Barstool Sports. After just one episode, ESPN canceled the show due to both internal and external pressure.
While all of this recent political history is fresh in the minds of critics, it has nothing to do with the new layoffs. These cuts are a cost-saving effort brought on, more than anything, by the continued rise of cord-cutting.
Disney’s acquisition of the controlling stake in MLBAM Tech this year will prove pivotal for the ESPN Plus product and for ESPN’s future.