Dwight: "Michael, what is the meaning of this email that everyone got?"
Michael: "You'll have to be more specific, Dwight, I get like eight emails a day."
Dwight: "This one - from David Wallace to all Dunder Mifflin -"
Michael: "Woohoo! Shoutout!"
Dwight, continues reading email: "Hello everyone, I'm sure you have seen the item in the Journal, I just want to stress that it's conjecture. If there is concrete news, you will know ASAP."
Michael: "Erin, do we have the Journal?"
Erin: "You mean your feelings journal? You told me to put it in the time capsule."
Michael: "Did you??"
Erin: Silently nods
Pam: "Michael. He means the Wall Street Journal... online."
Michael: "Oh, the Wall."
Ladies and gentlemen, I'm about to take all of us on dive into an article from the Wall! Typically, I'm about as educated as Michael Scott is when it comes to information that is normally in the the Wall, but today they touched on a subject that is very near and dear to my heart - Sports and ESPN.
Second, an introduction the the question that is presented and that will be discussed today: Should Disney offload the ESPN brand to save a bunch of money and disassociate themselves with a brand that has been hemorrhaging cash for years?
Third, let's set the table: A Disney investor wrote an article and sent it to Disney headquarters, making what he believed to be was a strong case for Disney to offload ESPN and get out of the market that is suffering as a result of cord-cutters who are ditching cable. The Wall cites subscription statistics from ESPN, which are primary driven by cable subscriptions, as reasons that Disney should at least consider divorcing ESPN.
"The network currently has 73.2 million subscribers, down from 87.7 million in 2017, according to Kagan, which estimates that number will fall to 60.8 million by 2025. Marc Ganis, president of the consulting firm Sportscorp, expects U.S. cable subscriptions to stabilize around the 50 million mark."
That's a lot of lost revenue, folks!
Industry experts who were interviewed by the Wall didn't agree with the investor's conclusion. Instead, they believed that Disney needs ESPN in order to fund the streaming platforms that they offer, even if ESPN isn't going to be the cash-cow that it once was.
Beyond cord-cutting, the article explains, is the rising costs of being in the live-sports market. The Big Ten just announced their multi-billion dollar deal with Fox, NBC and CBS. The NFL has and certainly will continue to command billions of dollars for their broadcast rights. The NBA, Major League Baseball, and even the NHL have all seen huge increases in their price as well. Why? Because people love live sports, and aside from live sports, people don't really watch live TV anymore.
Sports leagues know this as well as anyone in the TV industry does - they control the supply and are simply responding to the demand with their price tags.
Suffice to say, the revenue model for ESPN continues to get more and more complex.
ESPN has ESPN+, its own streaming service, and subscriptions are growing. But, the revenue model is vastly different for ESPN+ than it has always been for traditional ESPN. As a result, the revenue doesn't come anywhere near the levels it would need to in order for ESPN to go all in on streaming and start moving top-tier content to The Plus.
Times are tough in Bristol, my friends, and we've all known this for quite some time.
Now it's time for me to stop summarizing the words of smart people from the Wall and showcase my ignorance by using original thoughts from my brain.
We're not going to take the time to do a full on SWOT analysis today (that feels like some REALLY fun content for the month of May), but let's talk a little bit about some of the cards that ESPN still holds, at last as it relates to college football.
Clearly, ESPN has to worry about more than college football, but if you look at what the network has done over the last few years, it seems pretty clear that CFB is their king. They cater to the sport more than any other sport (though, I'd bet they would sacrifice all of their CFB allegiance to get a bigger piece of the NFL pie if they could, but that's neither here nor there). For the last couple of decades, ESPN has owned college football.
And they still kind of do.
Losing the Big Ten is a huge hit, there is no question about that. But, ESPN will gain back the SEC in exchange. As long as ESPN is associated with national powerhouse brands like Alabama and Georgia, they are going to be a pretty huge gorilla in the college football world. Couple that with the death grip that ESPN has on the ACC for the next decade, and the network can also claim Clemson as one of its biggest partners.
Sure, you can argue that teams like Ohio State or USC hold more national cachet than the schools in the south, but when it comes to winning on the field, nobody has done it better than the SEC and Clemson.
In fact, let's go back to 1984 (why 1984? lmao - you know why) and tally up national champions. Yes, I completely understand and recognize that the conference champions of yesteryear were in a different CFB model and difference conference alignment structure, but just bear with me on this journey.
Since 1984 here is a breakdown of National Champions by modern (as in 2024 and beyond) conference layout.
PAC-12 - 2 (Really it's kind of 1 as Miami claims the 1991 National Championship just the same way Washington does, and Georgia Tech claims 1990 the same way Colorado does, but we're giving full credit.)
Big 12 - 1 (Go Cougs)
Independents - 1 (Go Irish)
Big Ten - 9 (and one of those years is two future Big Ten opponents who each claim a championship - nine claims, eight seasons)
ACC - 10
SEC - 19
As long as ESPN is affiliated with the ACC and SEC, they're going to continue to be the biggest voice in college football. The results on the field make it impossible to argue otherwise.
That's a strength for the network, and it's also an opportunity for them. They have the biggest voice, they have the biggest teams, and they are still the only network (sorry FS1, you're just not there yet) that has 24-hour sports coverage every day. ESPN might be losing its stranglehold on CFB games on Saturdays, but they still own the news cycles and the narratives about CFB games from Sunday - Friday, and that's important.
ESPN can use that to their advantage, and they probably will. Obviously, the network can't just ignore the Big Ten because they aren't being talked about, but they don't have to go out of their way to talk about them either. Ohio State will always be a talking point no matter what. Michigan, USC, and Penn State are probably in that boat as well.
Beyond that? Teams will have to earn the right to be talked about on ESPN on Sunday - Friday. Until Fox or NBC or CBS figures out a way to really tackle the CFB narrative coverage, ESPN still gets to dictate terms. And if they want to talk about how overrated Michigan State or UCLA is, they will. Most of the country will buy into those narratives because they heard it on ESPN, and there isn't anyone else talking about it on a random Wednesday afternoon.
The NHL is a great case study for the power that ESPN has that they never talk about.
In 2011, the NHL inked a record-setting deal with NBC Sports. At the time, the deal produced more money for the League and more nationally televised content for hockey fans. There was no reason not to sign this deal for the NHL. So they did. They moved their primary home from ESPN to NBC.
Have you heard much about hockey in the last decade? Me neither.
Earlier this year, the NHL inked a new deal with ESPN and moved hockey back onto the Mothership. They received more money from ESPN this time, but the primary driver for the move was to drive future growth, something that the League hadn't seen while they were on NBC. One specific quote from The Athletic's Sean Shapiro really stands out from his story detailing the NHL's deal with ESPN back in February:
"The league was looking to get away from NBC with hopes of getting both a better payday, which it did, and getting the sport back onto platforms that help drive sports conversation beyond the traditional hockey fan. ESPN, and Turner, are more widely available and have a more casual sports viewership, while the typical NBCSN viewer, which has since been shut down, wasn’t captivating the casual fan audience."
Getting the sport back onto platforms that help drive sports conversation.
Clearly, college football is bigger than hockey, and clearly, the Big Ten's deal with Fox will keep them more relevant than a hockey deal with NBC Sports. But, even though they are minimized, the risks remain the same.
ESPN owns the conversations. That's the market that doesn't have a dollar value and that nobody but ESPN has been able to crack.
ESPN's talking heads are some of the biggest celebrities in college football. Kirk Herbstreit is so big that he will on NFL broadcasts this year in addition to college football broadcasts. His popularity is only going to continue to grow.
It's guys like Herbstreit who drive the college football conversation each and every day. As long as ESPN has a monopoly on that conversation, they will be a force to be reckoned with in college sports.
So, getting back to our friends from the Wall's article - should Disney jettison ESPN?
I sure don't think so.
Instead, if I was running Disney and wanted to keep ESPN at the top of the college football pile, I would lean HARD into my college football coverage that is on the air from Sunday-Friday.
If ESPN can't compete with the rising costs for live sports content, then they need to do what they can to attack the demand. As they talk less and less about the non-ESPN affiliated schools, it's possible (even likely) that interest in (most) of those schools drops across the country.
Ohio State fans will always be loud and present. So will Michigan fans.
But the rest of them?
If ESPN creates a narrative that USC isn't as good as the SEC, USC fans won't show up. If ESPN doesn't give Maryland or Iowa any air time on their shows, they only way they become part of the conversation is if they knock out Ohio State.
That's the power that ESPN has and that's how ESPN can remain on top of the CFB discussion.
But also, as I clearly stated earlier, I'm much more of a 'Wall' guy than I am a 'Journal' guy... so what do I know?