The news of ESPN's hundreds of layoffs this week staggered the sports world. How could the leading media company in all of sports, and maybe even in all of media, cut almost 1/6th of their workforce? How could a company that spends billions of dollars (yes, that's billion with a "B") on rights deals just for the privilege to televise games not have anymore room for a senior staffer in the accounting department? How could one of the laid off employees drive by the new multi-million dollar digital center and not think there was something in this picture not adding up?
Perhaps what isn't adding up is ESPN's longstanding invulnerability over the sports world. ESPN's value has been placed in the tens of billions of dollars. Forbes even remarked, "The reality is that there is not another media property in the world worth as much as ESPN because no media asset delivering content generates close to as much money." And truth be told, as cold-hearted as it seems, the washing out of veteran highly-paid employees with younger (i.e. cheaper) alternatives to maximize profit is nothing new for corporate America. In fact, ESPN posted job listings for many new positions this week, presumably including ones that had just been filled days earlier, and announced a high-profile hiring of southern sports radio personality Paul Finebaum. ESPN isn't hurting for business.
However, one of the reported reasons for ESPN needing to slash dollars from its payroll is the humongous rights fees the network has dished out to the NFL, college football, and other sports in recent years.no comments