The long-reported layoffs at ESPN will reportedly take place over the next month. That, according to sports media reporter Richard Deitsch of Sports Illustrated.
What hadn’t been rumored or reported, until now, is that ESPN will look to actually buy out some talent currently under contract. That represents a sharp departure from past ESPN policy. The Bristol-based sports giant typically refrains from buyouts, because like many companies they don’t see the sense in paying someone to not work. The decision to depart from that way of doing business suggests that ESPN wants to have the layoffs and the massive talent shake-up completed quickly.
According to Richard Deitsch of Sports Illustrated, ESPN has a couple different reasons for why they want those the layoffs to go so quickly:
Sources tell SI.com that ESPN management expects to finish most of its job cuts prior to the company’s upfront presentation for media buyers on May 16 and possibly by May 9, the date of Disney’s second quarter earnings call.
Last month SI reported ESPN was undergoing significant cost-cutting on its talent side (people in front of the camera or audio/digital screen). Multiple sources said ESPN had been tasked with paring tens of millions of staff salary from its payroll, including staffers many viewers and readers will recognize. Jim Miller, the author of the oral history of ESPN, said he believed the number of staffers impacted would be between 40 to 50. Those with contracts coming up would be particularly vulnerable. The company is also expected to buy out some existing contracts, which is something rare for ESPN historically beyond a few NFL talents.
On Sunday morning, an ESPN spokesperson declined comment.
The massive cuts, willingness to buyout contracts, and the attempt to have all this completed in time for a couple key dates on Disney’s financial calendar strongly suggest that Disney has exerted significant pressure on ESPN President John Skipper to get his network looking better on the spreadsheet.
Consistent with our reporting, ESPN’s massive subscriber loss, plummeting revenues, and exploding sports rights fees have panicked board members at the Magic Kingdom, in addition to shareholders and potential investors. Perhaps these aggressive cuts show, better than anything else, just how much things have changed for ESPN in the last five years, having gone from playing with seemingly endless amounts of their own money, and Disney’s, to all of a sudden having to play the bottom line, spreadsheet game much, much more strictly than they have at any time in the recent past.
With the expected savings of “tens of millions” coming from the layoffs, ESPN’s bottom line profitability will no doubt improve, at least in the short term. However, many will question whether or not ESPN’s coverage and analysis of sports will still be as good with a radically down-scaled staff.
Then again, given that no one seems to like ESPN or anything they do, it might actually help.
Follow Dylan Gwinn on Twitter: @themightygwinn