Will be interesting to see how this affects upcoming negotiations and potential ACC and B12 networks. Sounds like they're cutting where they can to afford the growing costs of rights.
ESPN Tightens Its Belt as Pressure on It Mounts
Sports-TV powerhouse ESPN, a profit machine that has long towered over the media landscape, is showing signs of stress as the pay-TV industry goes through an unprecedented period of upheaval.
A decline in subscribers as customers trim their cable bills, coupled with rising content costs and increased competition, has ESPN in belt-tightening mode, people familiar with the situation say.
The company, majority owned by Walt Disney Co. DIS 0.36 % , has lost 3.2 million subscribers in a little over a year, according to Nielsen data, as people have “cut the cord” by dropping their cable-TV subscriptions or downgraded to cheaper, slimmed-down TV packages devoid of expensive sports channels like ESPN.
At the same time, the prices ESPN pays for the rights to show games are ballooning. Rivals including 21st Century Fox Inc. FOX 0.44 % ’s Fox Sports and Comcast Corp. CMCSA 0.52 % ’s NBC are aggressively pursuing sports properties to feed their own outlets, which is also driving up prices. (Fox and News Corp, NWSA 0.14 % owner of The Wall Street Journal, were part of the same company until 2013.)
Last year, ESPN agreed as part of a renewal deal with the National Basketball Association to triple its average annual fees from $485 million to about $1.47 billion, people familiar with the deal said.
http://www.wsj.com/article_email/espn-tightens-its-belt-as-pressure-on-it-mounts-1436485852-lMyQjAxMTA1MjEzMDkxMjAwWj
ESPN Tightens Its Belt as Pressure on It Mounts
Sports-TV powerhouse ESPN, a profit machine that has long towered over the media landscape, is showing signs of stress as the pay-TV industry goes through an unprecedented period of upheaval.
A decline in subscribers as customers trim their cable bills, coupled with rising content costs and increased competition, has ESPN in belt-tightening mode, people familiar with the situation say.
The company, majority owned by Walt Disney Co. DIS 0.36 % , has lost 3.2 million subscribers in a little over a year, according to Nielsen data, as people have “cut the cord” by dropping their cable-TV subscriptions or downgraded to cheaper, slimmed-down TV packages devoid of expensive sports channels like ESPN.
At the same time, the prices ESPN pays for the rights to show games are ballooning. Rivals including 21st Century Fox Inc. FOX 0.44 % ’s Fox Sports and Comcast Corp. CMCSA 0.52 % ’s NBC are aggressively pursuing sports properties to feed their own outlets, which is also driving up prices. (Fox and News Corp, NWSA 0.14 % owner of The Wall Street Journal, were part of the same company until 2013.)
Last year, ESPN agreed as part of a renewal deal with the National Basketball Association to triple its average annual fees from $485 million to about $1.47 billion, people familiar with the deal said.
http://www.wsj.com/article_email/espn-tightens-its-belt-as-pressure-on-it-mounts-1436485852-lMyQjAxMTA1MjEzMDkxMjAwWj
