ESPN’s slow-roll nightmare shouldn’t surprise anyone

Even sacred cows end up in the attention economy’s abattoir

This piece originally appeared in View From the Top, ALP Strategies’ newsletter covering the intersection of marketing, media, and technology. Subscribe here. You’ll be glad you did.

Last month, Bob Iger was caught drinking cologne, and has spent subsequent weeks insisting it’s all cool, he is totally a social drinker and what you saw really wasn’t that big of a deal. Metaphorically.

After his Sun Valley-sitdown with CNBC’s David Faber, notable for being a CEO interview with CNBC that actually broke news, Wall Street analysts and media nerds near and far have spent the dog days of summer reading the tea leaves about Disney’s future.

Among the House of Mouse brands he revealed are in the cross hairs? The one-time perpetual money machine ESPN. Now on the table is the once unthinkable: Putting pieces of the thing up for sale. (ABC is also being eyed with a carving knife, and there are even rumblings of a possible Disney sale to Apple). 

The Times last week did a deep dive into the problems at the network:

ESPN has been Disney’s financial engine for nearly 30 years, powering the company through recessions, box office wipeouts and the pandemic. It was ESPN money that helped Disney pay for acquisitions — Marvel, Lucasfilm, Pixar, 21st Century Fox — and build a streaming service, transforming itself into a colossus and perhaps traditional media’s best hope of surviving Silicon Valley’s incursion into entertainment.

Those days, ESPN’s best, are over.

With its dual revenue stream — fees from cable subscribers and advertising — the sports juggernaut continues to earn billions of dollars for Disney. In the first six months of the 2023 fiscal year, Disney’s cable networks division, which is anchored by ESPN and its spinoff channels, generated $14 billion in revenue and $3 billion in profit.

The problem: Wall Street is fixated on growth. Revenue for those six months was down 6 percent from a year earlier, as profit plunged 29 percent.

Legacy television has desperately clung to the belief that live sports and news are an unbreachable moat. It’s looking like that belief is actually a delusion.

Is nothing sacred? No. Not in the attention economy.

Something notable in this piece is its fixation on cord-cutting and carriage fees. 

True, that’s the immediate cause of ESPN’s revenue woes. But we think that’s more of a symptom, and the actual disease is much more severe.

This piece doesn’t address an underlying change in how fans engage with sports. 

Like so many other pieces of the media ecosystem, fandom has become unbundled, especially now that betting on games is legal in many states. More and more, attention follows moments and stats, not the game as a whole.

Put bluntly: Kiss your captive audience goodbye. Sure, sports are still very lucrative. It's just that broadcast rights and access to games in their entirety are way less valuable, especially when you consider the billions spent to obtain them.

What ESPN faces is not just a problem of monetizing distribution. It’s that the eyeballs are looking elsewhere.

Disney will probably find somebody to buy pieces of ESPN. The media world has no shortage of suckers willing to think sports is a money-printing machine.

But for those watching, heed the moral of this story. When it comes to how your audience spends its attention, change is the only constant.