Why Did ESPN Make Major Cuts?

**Many of you know my distaste for the 4-letter network known as ESPN, but I'd like to put that personal bias aside momentarily and discuss what happened today. Also, I'm not a financial guy, so I'm probably screwing up really important financial speak that'll have the experts ripping their hair out (what's left of it). Sorry in advance. 

As we speak, ESPN continues to make major cuts to its staff. The departments that seem to have taken the biggest hit are the online content folks, and some of the on-air talent which, surprisingly are their best two products. Some recognizable names include Ed Werder, Danny Kannell, Jim Bowden and almost their entire hockey staff including Pierre LeBrun, Scott Burnside, Boston's own Joey McDonald and word is, John Buccigross' contract will not be renewed. While it is shocking, there's a lot to consider. 

It's pretty easy to come up with a bunch of small to mid-size reasons why ESPN's revenues are plummeting; bad investments like the College Football Playoffs, overpaying talent (like Rex Ryan), their inability to connect with a younger audience, they're obsession with LeBron (and Deflategate, Johnny Football, Tim Tebow, Brett Favre) diluting the market, Disney's slight dip in revenue, etc. etc. etc. Here's really what it all comes down to. 

If you currently pay your cable bill every month, did you know that almost $7.00 of your money goes directly to ESPN? Whether or not you watch it. Seven bucks a month. Just last September and October, ESPN lost a combined 1.176 million viewers*. At 7 bucks a pop. The math is astonishing.

Last year was a great year for everyone at Disney, except ESPN. Again, I'm no business guy, but it seems like with consumers being more apt to switch quickly, the ebbs and flows of profit seem to be more and more dramatic. Although for ESPNs sake, the decline only seems to continue to escalate. 

Source (and if you want real mathematics so good they'll give you a Popsicle headache, read this great piece:



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