Is the worldwide leader in sports getting ready to start cutting some of their fat? If the report at Deadspin is to be believed, the answer is, it certainly looks that way. In fact, the report indicates "hundreds" will be meeting the ax, which, considering the popularity of, well, everything related to sports--especially in the social media world--the move comes as something of a surprise. Regardless of the moves Fox Sports makes (or are in the process of making), the fact is, ESPN is pretty much a monopoly. Sure, there are sports on other channels, but when it comes to brand proliferation, no other televised sports entity compares. So what would cause the self-proclaimed Worldwide Leader in Sports to consider layoffs, especially in a world where they set the tone, at least regarding sports conversation?
The Deadspin article features snippets from recently-departed employees who offer the following insight:
I was laid off from ESPN today after 9 and a half years. Completely out of the blue, no warning at all. I was told it was 10% across the board, which would be roughly 400. I was told the reason was they needed to make their profit margin and they chose to do that via layoff of staff... we were told that the layoffs ARE tied to the profit margin that ESPN needs to meet and the fact they haven't met that number. Your comments about them buying all of these live rights and now needed to reduce overhead costs is dead on.
As an example, here are two of the "live rights" deals being discussed in these emails to Deadspin:
- ESPN spends $825 million over 11 years to gain exclusive rights to the US Open (tennis, not golf).
- ESPN extended its partnership with SEC until 2034, which gives ESPN ownership of the upcoming SEC Network. While the terms of the contract were undisclosed, the two entities will split the SEC Network profits evenly.
Are these two business acquisitions/partnerships the reason why these layoffs are happening in Bristol, Connecticut? It's hard to come up with any other conclusion, although, Disney (ESPN's parent company) has been laying off employees as well. Maybe ESPN is trying to keep with their owners.