Are ESPN in Trouble?

Q2 2015 was the industry’s worst for pay television subscription losses. ESPN’s subscriber base has fallen to 91.8 million, from 98.9 million in Q3 2013. ESPN made an announcement in October that the network was laying off about 300 employees, or 4 percent of its work force.

The Walt Disney Company own 80% of ESPN with the Hearst Corporation owning the rest. Disney, the world’s largest entertainment group, will report its fiscal full-year and fourth-quarter results after markets close on Thursday.

This comes at a time when Walt Disney is looking to cut costs based on the station’s lack of growth in recent years. ESPN contributes about 25 percent of the company’s operating profit. Its costs are massive after the annual fee to air NBA games trebled from $485 million to about $1.47 billion.

Fear is spreading that the number of people canceling their cable and satellite subscriptions is accelerating. Television ratings and advertising sales are both said to be tanking too.

Questions about the long-term future remain. Investors are looking for executives to show how they are adapting for survival. That includes exploiting new digital distribution outlets, like streaming and mobile.

 

 

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