ESPN will fire between 200 to 300 employees in the next few months as its parent company Disney downsizes.
The Big Lead reports that sources inside and outside of ESPN acknowledged the coming layoffs, the first instituted by ESPN since 2013, resulted from Disney’s order to cut $100 million from the 2016 budget and $250 million in 2017. ESPN released a statement reading: “ESPN has historically embraced evolving technology to smartly navigate our business. Any organizational changes will be announced directly to our employees if and when appropriate.”
Because numerous consumers have eschewed buying cable TV and watch ESPN online, ESPN started cutting costs, including losing Bill Simmons, Colin Cowherd, and Keith Olbermann.
The Wall Street Journal reported that ESPN lost 3.2 million subscribers in a little more than one year; the network’s NBA annual fees will grow from $485 million per year to $1.47 billion by the 2016-17 season, when ESPN’s new contract with the NBA is implemented. Of the major cable channels, only the Weather Channel lost a higher percentage of subscribers between 2011 and 2015.
The Journal also reported that Disney relied on ESPN for 25% of the company’s operating profit in 2015, according to Nomura Securities. SNL Kagan reported that ESPN earns the most carriage fees of any TV channel, roughly $6.61 a month per subscriber.