300 ESPN employees lost their jobs last week, but they are not the first media company to do so. While content matters, employees don't, and the ultimate bottom line, when you are a public company, is to appease the shareholders. And when revenues don't rise, costs must be cut to sustain and ideally grow profits. As The Godfather likes to remind us, "It's not personal, it's strictly business."
Truth is, it is personal and affects many individuals as well as their families. While content costs rise, and sports content costs skyrocket, cord cutting has led to lost subscribers and advertising dollars have shifted from TV to digital. ESPN made those same high programming cost deals while watching its base erode. Its parent company, Walt Disney, demanded that ESPN cut costs to support profit goals. And while other networks have tried to recapture lost subs by offering OTT services, including CBS, HBO, Showtime, and most recently Starz, to name a few, ESPN has not because its license fee agreements could lead to cable operators dropping the service from their cable line-ups.
Its happened to in other media. The Daily News in NYC is cutting writers and other personnel to keep afloat, too. The sad truth is that this trend will only continue to mount as subscribers flee, costs rise, and the easiest way to make up the difference is to cut labor. And while ESPN may be in the news today, other networks have done the same thing in other years and will continue to announce cuts in the near future. It is not the end of job cuts, only the beginning. For my friends at ESPN and at other networks, I can only hope that as this door closes, other opportunities open.