ESPN may pull the plug on National Football League game telecasts when the current contract for Monday Night Football expires despite it being the network’s financial backbone. In the meantime, the self-named Worldwide Leader in Sports reportedly lost 480,000 subscribers in October, as the cord-cutting trend continues and viewership otherwise erodes for whatever reason or combination of reasons.
ESPN is drowning in red ink, in part because it pays the NFL $2 billion per year for the games. As a result of its ongoing challenges, the Bristol, Connecticut-based channel is also a drag on the earnings of parent company Disney. Another round of layoffs is expected in the next 30 to 60 days at ESPN, as a follow-up to separations in April, the summer of 2013, and October 2015.
An article in the Hollywood Reporter by well-connected author James Andrew Miller, who wrote a definitive history of the sports network, seemingly puts the lipstick on the pigskin, as it were, for ESPN to perhaps part ways with the NFL when the current agreement runs out.
The essay claims, among other things, that ESPN won’t forfeit any cash from cable and satellite providers in the process.
“First, quietly, ESPN has been able to pull off a dramatic judo move in recent agreements with its affiliates, one whose importance cannot be overstated: There is no longer specific contract language that requires the cable giant to have NFL games in order to earn its lofty (and industry-envied) subscriber fees, currently more than $7 per household. This means the network would not face automatic decreases in that vital artery of its dual revenue stream. Sure, distributors would be aghast, demanding to negotiate lower fees probably immediately, but the point is, there would be negotiations, enabling ESPN to do everything it could to keep those numbers as high as possible…”
Longtime ESPN critic Clay Travis of Fox Sports Radio, who has predicted the splintering of the ESPN business model, reported on his Outkick the Coverage blog that ESPN lost more than 15,000 subscribers every day this month based on Nielsen estimates. He is also not buying the explanation presented in THR story at face value.
“…Effectively ESPN is tossing up a trial balloon letting Wall Street know they probably can’t afford to keep Monday Night Football rights past 2021 when its current deal expires, but they’re trying to make it seem as if this is their decision and it’s a good thing for the company…But if you think the cable and satellite companies are going to keep paying $7 a month to ESPN without the NFL package, I’ve got a bridge to sell you…ESPN’s business is collapsing so rapidly that they are now trying to figure out which would be more destructive — losing billions on the NFL or losing billions in cable and satellite revenue because they don’t have the NFL…”
NFL TV ratings are down across the board, and last night, the MLB World Series Game 5 between the Los Angeles Dodgers and the Houston Astros on the Fox network outdrew the NBC broadcast of the Pittsburgh Steelers-Detroit Lions NFL matchup. There is some data suggesting that the take-a-knee player protests during the national anthem have harmed the NFL brand.
Travis suggests that in the future, a big tech company like Facebook, Netflix, or Amazon might step in and acquire the rights to NFL games either through direct negotiations with the league at the appropriate time or if ESPN decides to auction off existing contracts.
As the Inquisitr has detailed, ESPN has also alienated many politically conservative viewers (or former viewers) through its emphasis on social justice issues rather just delivering games and game highlights. ESPN’s public editor has previously acknowledged ESPN’s leftward movement, which has drawn criticism from Travis as well as ex-ESPN journalist Jason Whitlock of Fox Sports 1, among others.
The visiting Denver Broncos take on the Kansas City Chiefs at Arrowhead Stadium tonight on ESPN Monday Night Football.
[Featured Image by Bob Child/AP Images]