clock menu more-arrow no yes

Here’s why ESPN had mass layoffs today

Short version: Costs are up. Subscribers are down.

Asa Mathat for Vox Media

Why did ESPN let go of 100 of its writers, reporters and on-air staff today?

The programmer, which has around 8,000 employees, says it’s making the moves as it adapts its mix of TV and digital programming to the Twitter/Facebook/Snapchat age.

“Our content strategy ... still needs to go further, faster ... and as always, must be efficient and nimble,” ESPN President John Skipper wrote in a note to employees.

Another reason is less positive: ESPN’s business, once the envy of the media world, is on more wobbly footing these days.

Its content costs are rising as it pays ever-increasing fees for rights to show college and pro sports. But its subscriber base is shrinking as pay TV customers cut the cord or never sign up for it in the first place.

This one hasn’t snuck up on ESPN or anyone who watches the company: Skipper and I talked about it at length in 2016, at Recode’s Code Media conference.

The short version of his answer: ESPN thinks it will continue to grow its subscriber revenue by charging its remaining subscribers (via pay TV distributors) more for the service, and that it can keep growing ad rates, too.

But ESPN can’t simply grow its way out of this problem. It will have to cut costs, too.


This article originally appeared on Recode.net.