Once an indispensable sports powerhouse, cable TV network ESPN has gone from must-see-TV for millions of sports fans to financial boondoggle for owner Disney with the network losing up to 10,000 subscribers a day, a report says.
“A floundering ESPN, with rising costs and declining viewership, continued to sink Disney’s DIS, +0.24% financial results during its fiscal first quarter,” MarketWatch.com reported.
With the impact of the flailing sports network, Disney’s revenue fell 3 percent, and its profits sank 14 percent, the financial site reported.
As to ESPN itself, the network lost subscribers, found its average viewership crater, and experienced falling advertising rates even as its programming costs climbed. And this fall from grace continued even after Disney insisted that ESPN had reached its bottom after the previous quarter came to an end.
Disney CEO Bob Iger, though, is still putting a sunny face on this quarter after quarter failure saying he still “believes” in the network.
“We believe that the best approach to doing well in a world that is disruptive, in a world that has far more digital distribution, is to have great content and tell great stories. And that includes ESPN, by the way,” Iger said during a recent conference call. “But I can tell you that it is our full intent to go out there aggressively with digital offerings direct to the consumer for ESPN and other Disney-branded properties.”
Despite Iger’s happy talk, ESPN has lost about 12 million subscribers, down to 88 million from its 100 million subscriber high from back in 2011. That lost revenue amounts to about $7 per subscriber, according to The Wrap.
ESPN’s operating costs are also negatively impacting its finances, especially the $7.3 billion it has to pay out to the various sports leagues for access to game broadcasting. But, according to at least one analyst, ESPN’s political lurch to the left has also led to its massive loss.