Mixing MSNBC with ESPN ruins things.

Keep politics out of sports.

(10-30-2017 06:36 PM)levydl Wrote:  

(10-30-2017 05:55 PM)rath v2.0 Wrote:  This is not the first murmuring about ESPiN possibly not being able to afford the NFL going forward.

They are hemorrhaging $$.

http://www.hollywoodreporter.com/news/wh...mn-1052792

ESPN is in no sense hemorrhaging money. It's odd that this has become the narrative. It makes Disney billions of dollars a year.

+1

Content, people. It's in no way losing money for the company. Making less money? Yes. Losing money? Not even close.

This narrative of losing money is simply a fallacy.

There's this thought that things just go up and up forever. When had that ever been true?!? There's a pricing correction coming due for major leagues sports rights. It'll likely be the case that ESPN can afford to pay, however the price will be moderated due to the viewing habits of the next generation.




mc

(10-30-2017 06:38 PM)doss2 Wrote:  Mixing MSNBC with ESPN ruins things.

Keep politics out of sports.

Keep your politics off of this board. TIA

(10-30-2017 06:36 PM)levydl Wrote:  

(10-30-2017 05:55 PM)rath v2.0 Wrote:  This is not the first murmuring about ESPiN possibly not being able to afford the NFL going forward.

They are hemorrhaging $$.

http://www.hollywoodreporter.com/news/wh...mn-1052792

ESPN is in no sense hemorrhaging money. It's odd that this has become the narrative. It makes Disney billions of dollars a year.

You are missing the point at the 10,000 foot level. This is the reason for the season (of layoffs...again). Props to Usmbluegray for this.

Quote:In the month of October ESPN lost over 15,000 subscribers a day in October per the latest Nielson estimates.

31 days x 15,000 / day = 465,000 subscribers lost in one month.

Cable providers currently pay a total of $28.32 for a few dozen channels, depending on the provider and the cable package, with ESPN taking over $6 of that. Meanwhile median price paid for each channel a subscriber gets is 14 cents. ESPN is estimated to cost $8.37 per month in 2018, an increase of 39%.

Let's say ESPN makes around $7.00 per subscriber per month.

465,000 lost subscribers in Oct x $7.00 per subscriber = $3,255,000 lost every month going forward.

If they lost on average 300,000 per month over the course of this year...

300,000 x $7.00 = $2,100,000 lost per month

In Jan they would be down $2.1M in revenue.

In Feb they would have $4.2M less in revenue because the subscribers lost in Jan aren't paying and neither are the lost Feb subscribers.

Those are monthly revenue decreases. There's also the cumulative impact.

In Jan they expected an additional $2.1M in revenue that they won't see.
The would expect monthly revenue of $4.2M in addition to the $2.1M they would have earned in Jan. In essence, revenue would be down $6.3M in Feb Year-to-Date.


Jan: $2.1M / YTD $2.1M
Feb: $2.1M x 2 = $4.2M / YTD $6.3M
Mar: $2.1M x 3 = $6.3M / YTD $12.6M
Apr: $2.1M x 4 = $8.4M / YTD $21.0M
May: $2.1M x 5 = $10.5M / YTD $31.5M
Jun: $2.1M x 6 = $12.6M / YTD $44.1M
Jul: $2.1 x 7 = $14.7M / YTD $58.8M
Aug: $2.1M x 8 = $16.8M / YTD $75.6M
Sep: $2.1M x 9 = $18.9 / YTD $94.5M
Oct: $2.1M x 10 = $21.0M / YTD $115.5M
Nov: $2.1M x 11 = $23.1M / YTD $138.6M
Dec: $2.1M x 12 = $25.2M / YTD $163.8M

Next year they have to downgrade their revenue forecast. On top of that, they'll continue losing subscribers which has a cumulative year-over-year impact.

On top of that, as they lose subscribers that means their viewership numbers drop.

As fewer and fewer eyes are watching the games advertisers will want to pay less for commercials.

Lost ad revenue coupled with lost subscriber revenue is a serious problem.

The folks at Disney know this is a sh!t storm...forget on the horizon, it's here.

Surely it's only a matter of time before me and my fellow cord-cutter buddies can no longer use our parents' cable login and get unlimited access to watchespn. ESPN has to be missing out on a lot of money that way...I know so many people that use a cable password that isn't their's to get watchESPN.

(10-30-2017 09:15 PM)rath v2.0 Wrote:  You are missing the point at the 10,000 foot level. This is the reason for the season (of layoffs...again).

This is not right. From 10,000 feet, ESPN nets like $4 bil. a year for Disney. Even under the most dire predictions, it will continue to make billions of dollars a year in profit. You can say that it's losing subscribers or that revenues are falling or that it will be worth less in the future than it is now, but those are not the same things as "it is hemorrhaging money." And the reason for the layoffs is that ESPN can't keep its revenues as high as they have been, so it needs to cut costs to keep profits up, and firing employees is an easy way to reduce costs without directly reducing revenues.

You can root for ESPiN to fail, but that doesn't mean that reality must agree with you.

They lost 15,000 subscribers... a day... this past month. It's ramping up not down. It was 7000 is day in September.

They are about to get clobbered by the online platforms, too. And they know it. Thus, the next round of layoffs. Their business model became antiquated.

(10-31-2017 09:49 AM)rath v2.0 Wrote:  They lost 15,000 subscribers... a day... this past month. It's ramping up not down. It was 7000 is day in September.

They are about to get clobbered by the online platforms, too. And they know it. Thus, the next round of layoffs. Their business model became antiquated.

Look, I know some people want it to be the case that ESPN is failing and that it's failing because it became a heathen liberal mouthpiece, but neither of those things is true.

BTW, I spent a lot of time in the M&A world and this feels like classic right sizing and cutting to change balance sheets and EBITDA prior to the sell off of an affiliate.

Bets that ESPN will be moved in the next 2 fiscal years?

Please stop the whole rooting for them to fail schtick. I could call you a fanboy. Would that resonate and be helpful? No? Yeah.

(10-31-2017 10:02 AM)rath v2.0 Wrote:  BTW, I spent a lot of time in the M&A world and this feels like classic right sizing and cutting to change balance sheets and EBITDA prior to the sell off of an affiliate.

Bets that ESPN will be moved in the next 2 fiscal years?

Please stop the whole rooting for them to fail schtick. I could call you a fanboy. Would that resonate and be helpful? No? Yeah.

You called it "ESPiN." How else does one read that?

I would bet that ESPN is still part of Disney in 2 years, sure.

(10-31-2017 10:01 AM)levydl Wrote:  

(10-31-2017 09:49 AM)rath v2.0 Wrote:  They lost 15,000 subscribers... a day... this past month. It's ramping up not down. It was 7000 is day in September.

They are about to get clobbered by the online platforms, too. And they know it. Thus, the next round of layoffs. Their business model became antiquated.

Look, I know some people want it to be the case that ESPN is failing and that it's failing because it became a heathen liberal mouthpiece, but neither of those things is true.

More than one thing can be true at the same time.... ESPN is losing viewership because the business model has changed, but politics has helped expedite their demise.

Heard an interest quote from Jason Whitlock the other day. Basically he said that ESPN made the mistake of going all in on politics as opposed to spending the time/resources to figure out how to change their business model so they can grow.

Deal. Peruse investor analysts' dissertations on the subject over the past year or so. Interesting reading.

We shall revisit when and if appropriate.

(10-31-2017 10:15 AM)CliftonAve Wrote:  

(10-31-2017 10:01 AM)levydl Wrote:  

(10-31-2017 09:49 AM)rath v2.0 Wrote:  They lost 15,000 subscribers... a day... this past month. It's ramping up not down. It was 7000 is day in September.

They are about to get clobbered by the online platforms, too. And they know it. Thus, the next round of layoffs. Their business model became antiquated.

Look, I know some people want it to be the case that ESPN is failing and that it's failing because it became a heathen liberal mouthpiece, but neither of those things is true.

More than one thing can be true at the same time.... ESPN is losing viewership because the business model has changed, but politics has helped expedite their demise.

Heard an interest quote from Jason Whitlock the other day. Basically he said that ESPN made the mistake of going all in on politics as opposed to spending the time/resources to figure out how to change their business model so they can grow.

ESPN is losing viewers at a slower rate than cable is losing subscribers from cord cutting. You cannot make sense of the numbers by putting it on this (perceived) turn to politics.

I think politics is not a primary factor. Their problem is cord cutting wasn't factored in when they signed these massive contracts. ESPN is in the distribution business and there's a lot more players coming into that arena. I see ESPN as the leader in that market but not the market setter like they have been. I think eventually they have to streamline and probably drop some traditional networks like ESPNU. Then move more focus to growing their streaming options but they've got a good start as a market leader in that area with ESPN3.

BTW I root for ESPN to fail because of their manipulation of the college conference realignment; not their move to be more political.

I think being tied to cable actually hurts them, and a lot of people would prefer to have ESPN without all of the Food Networks/MTV/HSNs that go with it. I know that is a lot of I thinks, without anything to back it up though.

A streaming service with NCAA games I can pick from would be ideal. I'm 33 and I've very much outgrown most of their sports shows. I used to watch it to gain information, but smartphones got rid of that need. The only actual show I watch is Gameday.

(10-31-2017 11:05 AM)Z-Fly Wrote:  I think being tied to cable actually hurts them, and a lot of people would prefer to have ESPN without all of the Food Networks/MTV/HSNs that go with it. I know that is a lot of I thinks, without anything to back it up though.

A streaming service with NCAA games I can pick from would be ideal. I'm 33 and I've very much outgrown most of their sports shows. I used to watch it to gain information, but smartphones got rid of that need. The only actual show I watch is Gameday.

You actually have that reversed. Alot of people would like to have Food Network/MTV/HSN without ESPN. there are 300 million people in this country and the the vast majority of them don't watch sports unless its the Super Bowl.

I wonder if this causes ESPN to rethink their plans for a partial streaming subscriber service. I don't see how they survive the demise of cable without it. There would have to be a lot of migration to SLING / DirecTVNow / PSVue with ESPN on that package, and I think a lot of subscribers are comfortable with changing up their package at will to fit the sports season (MLB or FS for baseball season with a switch to network or ESPN for FB / CBB).

They were originally going to offer a neutered version of their streaming service without cable subscription, but it wasn't going to include NFL or any of their major contracts. That isn't going to do it for most people.

I agree with RealDeal above. I want ESPN to suffer for their heavy-handed involvement in realignment. I'd rather attend every home game in person and go to BDubs to watch away games than give ESPN any more money.

(10-31-2017 10:02 AM)rath v2.0 Wrote:  BTW, I spent a lot of time in the M&A world and this feels like classic right sizing and cutting to change balance sheets and EBITDA prior to the sell off of an affiliate.

Bets that ESPN will be moved in the next 2 fiscal years?

Please stop the whole rooting for them to fail schtick. I could call you a fanboy. Would that resonate and be helpful? No? Yeah.

The question is does ESPN become another blockbuster or do they restructure to survive. They were slow to react to the threat streaming is to their old business model. They overpaid for content with long terms, primarily at times just to keep it out of their competitor's hands, and failed to believe that cable companies would lose their stranglehold on subscribers.
There is a subscriber floor for ESPN as long as they have content, the question is where it will be and can they leverage enough cash from it to pay for those contracts. Who steps up and buys these contracts if not ESPN. MNF will cost ESPN $1.9 Billion a year until 2021 for something that is currently being viewed by <20 million people a week. ~$5 a week/$20 month per viewer not including the cost of production. While MNF is probably the worst of their contracts, in a direct to consumer market where grandma is not helping subsidize ESPN $20 month is probably a good figure to support their expenses. I'm currently paying $25 month total for Espn & Hallmark (wife requirement) and 20 other odd channels. There's no way I pay $20 for the one or two games a week I watch on ESPN.

(10-31-2017 11:13 AM)crex043 Wrote:  I wonder if this causes ESPN to rethink their plans for a partial streaming subscriber service. I don't see how they survive the demise of cable without it. There would have to be a lot of migration to SLING / DirecTVNow / PSVue with ESPN on that package, and I think a lot of subscribers are comfortable with changing up their package at will to fit the sports season (MLB or FS for baseball season with a switch to network or ESPN for FB / CBB).

They were originally going to offer a neutered version of their streaming service without cable subscription, but it wasn't going to include NFL or any of their major contracts. That isn't going to do it for most people.

I agree with RealDeal above. I want ESPN to suffer for their heavy-handed involvement in realignment. I'd rather attend every home game in person and go to BDubs to watch away games than give ESPN any more money.

+2 on that one. Every time I watch the network my blood starts to boil.

I just finished looking at Disney's FY2016 Annual Report.

Things are not rosy:

- ESPN's numbers are buried inside of the Media Group's numbers. If ESPN news was good, they would be broken out.
- The Media Group's unamortized goodwill is roughly $16.3B. Very little of that is ABC/Cap Gemini since that acquisition is a little more than 20 years old. I am willing to bet that Disney is praying as much as they can that PWC doesn't do a review of goodwill with an eye towards determining if any of the goodwill is impaired.
- In some places, the report breaks out the Media Group into the Cable and Broadcast entities -- very few places -- mostly cap spending.
- The Disney Channels have far more viewers than does ESPN although one is left to assume that ESPN gets more per subscriber from the cable companies than does the Disney Channels. On the other hand, production costs within the Disney Channel are almost nothing compared to ESPN since ESPN has to buy the rights from the NFL, the SEC, etc.

tl;dr

There is NOTHING in the Disney annual report that suggests that things are hunky dory at ESPN.