Happy Memorial Day weekend!
If you’re going to be on the road this holiday season, make sure you download my new podcast exclusive once a week show called “Wins and Losses With Clay Travis,” where I have an in-depth conversation with one person each week.
This week’s guest is Jason Whitlock from FS1’s Speak For Yourself.
I think y’all will love it.
Okay, here we go with the mailbag:
“With Disney acquiring Hulu and ESPN+, how likely is it that ESPN can stem the tide with their continual loss of viewership? ESPN went balls deep with the NBA and this coupled with wokecenter pretty much crippled the franchise. In the court of public opinion, at least mine, there’s a loss of acceptance for espn to provide sports news/highlights without being barraged with wokeness shenanigans. There is no way a corporation like Disney is gonna support a woke center mentality for programming of ESPN+. My question to you is- if Disney tailors down the endless broadcasting doodoo that is the nba, removes all things woke center, can they bring back the ESPN we all used to know? And if they do, would people go back to watching espn or is the damage done?”
Well, I think Disney CEO Bob Iger and new president Jimmy Pitaro finally recognized that the ESPN brand was toxic to much of the country because of far left political leanings and I think they are doing their best to rectify this issue. I think they’ve realized — as well as their data has shown them — that most sports fans just want sports on ESPN. And if they can’t just have sports they at least want even-handed treatment of political opinions. ESPN had been failing at both of these things for years and I think they’re attempting to adjust course.
How have they changed?
I don’t think, for instance, that current ESPN leadership would give an ESPY for courage to Caitlyn Jenner.
Ultimately everything comes down to dollars and cents and I believe the Disney brass saw that WokeCenter was costing ESPN’s brand in a big way. This is actually a huge part of my book that came out in September, “Republicans Buy Sneakers Too.” Effectively Iger and Pitaro have acknowledged the entire thesis of my book is true — that allowing sports to be hijacked by left wing politics is bad for business.
(Of course this hasn’t led the woke left wing Twitter sports media who ripped me for multiple years for this opinion to admit they were wrong or acknowledge that I was right. But I never really expected that because there’s a certain percentage of woke sports media on Twitter that I drive insane. Which, to be honest, I love.)
But I do give Iger and Pitaro credit for finally realizing what I’d been pointing out for a couple of years. Say what you will about Disney, but ultimately the great thing about capitalists and capitalistic corporations, even those who are far left leaning, is eventually they will listen to what their markets are telling them. When you start losing money, it’s time to adjust your trajectory. Ultimately companies exist to make their shareholders money.
Now the big issue here that Disney faces when it comes to ESPN is this — the entire business model of ESPN is under attack because of cordcutting. And what Disney is attempting to do with ESPN+ is very different than what they are doing with Disney+ and Hulu. That’s because Disney+ and Hulu feature content that Disney owns and creates. That is, everything is original and proprietary. Think Marvel, Star Wars, and Disney characeters, that’s the lifeblood of these new services. Whereas ESPN’s entire business model is based on being a middleman. That is, Disney pretty much acts as the middleman when it comes putting on other people’s content in the world of sports.
Think about it, what do people watch on ESPN? Mostly the games themselves. Well, Disney doesn’t own any of that. What’s more, Disney has already guaranteed that the best middleman programming they have — the NFL’s Monday Night Football, the SEC, the ACC, the Big Ten, Major League Baseball, the NBA — all of that will air on existing ABC, ESPN, ESPN2, the SEC Network or the ACC Network properties.
So ESPN+ is the second-tier programming that isn’t good enough to air on all these networks themselves.
How do you get big numbers of subscribers for ESPN+? With better content that isn’t available elsewhere. Hence, the UFC deal, for example. But, and here is the problem, that content is very expensive to buy and it’s somewhat risky because of the new ESPN+ business model — subscriptions — which don’t provide the same guaranteed revenue streams as cable subscriptions do.
So the big question here is this — can ESPN manage to run both businesses, cable and streaming, and seamlessly transition to a more digital future with ESPN+ as the cable business collapses or is the network going to find itself like a guy riding a horse with one leg on each horse as those two horses begin to run in different directions?
An easy analogy here in the world of sports is Sports Illustrated, which is nearly dead as a business.
The internet killed Sports Illustrated’s business because the company couldn’t manage both print and digital.
That’s the best example of what ESPN should be fearing.
The best example of a company that pivoted is Netflix, which has managed to go from a DVD rental business to a middleman streaming business to an original content streaming business and thrived with all three businesses.
It’s possible that ESPN+ becomes a great business and ESPN manages the pivot, but it’s also possible that instead of one sports business that isn’t going to work very well, Disney is now running two sports businesses that aren’t going to work very well — one, ESPN, that is on a fairly rapid cordcutting decline that will mirror the decline of cable overall, and the other, ESPN+, which will lose money because the subscriber market isn’t as robust as Disney hopes and the content costs will be massive.
That’s why I think Disney will create a new digital bundle — ESPN+, Hulu, and Disney+ and charge pretty much the same amount as Netflix charges now for all three of these companies. That way, in theory at least, subscriber numbers will look good for all three services and maybe they can finesse the transition better than I expect.
The first big test of ESPN’s strategy will come with the NFL Sunday Ticket.
Is ESPN willing to take a huge, multi-billion dollar, swing to put NFL Sunday Ticket on ESPN+? (Maybe in conjunction with an agreement to put Monday Night Football back on ABC and with the NFL agreeing to give ABC a Super Bowl?) That will be a huge moment to give you an idea what the network’s plan is going forward.
Another possibility is that Disney attempts to spin ESPN off as a standalone business to avoid it becoming a drag on the existing business.
Regardless of your opinions on ESPN, this is an absolutely fascinating time in sports media and business, maybe the most fascinating time of our lives.
And anyone who says they know 100% how this will turn out is lying to you.
“Regarding the lackluster GOT final season, do you think it’s possible Benioff and Weiss just wanted out and wanted to move along as fast as they could?