OT: Disney stock hammered on earnings report, ESPN weakness to blame

Submitted by MGoArchive on

Source - http://blogs.wsj.com/moneybeat/2015/08/05/as-espn-loses-viewers-some-on-wall-street-move-to-sidelines-on-disney/

tldr; the ESPN spigot is drying up, and they've cut a few of the 'personalities' (worthless talking heads) that shouldn't be making more than local radio people. 

analysis - this will be a death by a thousand cuts - hopefully cord cutters continue into the tens of thousands, if not hundreds of thousands, quarter over quarter, year over year. Eventually we will move towards the European sports model, which Brian cited in a post a few weeks ago.

ESPN still makes up an insane percentage of Disney's total profit (40-something percent?)

Will be very interesting to see if the networks balk at Delany asking for more money in the upcoming contract talks. If I was Fox, I'd tell him you're getting the same amount that you were, because I don't see ESPN paying you any more than I am. Will be very interesting to see how this goes. In time, the golden goose that is the Big Ten Network will unfortunately be taken to the butcher for lack of golden egg output.

Tater

August 5th, 2015 at 1:45 PM ^

The only question is whether the Big Ten will be the last of the big renewals or the first casualty of the cost-cutting era.  They are still going to get plenty of money because non-cable networks still televise sports, but the days of ESPN being able to raise the market price by outbidding everyone are close to an end.

Monkey House

August 5th, 2015 at 1:54 PM ^

ESPN is horrible. I literally haven't watched one thing on that channel outside of an actual game in over 5 years. sports center stinks, all their shows are talentless and unfunny.

markp

August 5th, 2015 at 2:01 PM ^

I like ESPN and think they do a fine job. I don't listen to many of the talking heads, but that's regardless of network. College Gameday is fun and does a great job generating interest for the weekend's games.

Is it just trendy to hate ESPN lately because they're the behemoth with all the money? I have no problem with free market capitalism.

M-Dog

August 5th, 2015 at 3:38 PM ^

I love College Game Day.  College Football is my "tribe", and College Gama Day is the tribal campfire of football Saturdays.  

It's the thread that ties the whole day together, from Game Day in the morning to the breakaway highlights throughout the day, to the Game Day Final at 1:00 AM in the morning.

It can be dumb and sappy at times, and I wish it would go back to starting at 10:00, but I would miss it if it went off the air.  The idea of reporting from on-campus for a big game of the day and then doing updates from there throughout the day is pure genius.  It's what makes CFB unique. 

bronxblue

August 5th, 2015 at 2:37 PM ^

Yeah, I've never gotten the hate for ESPN to the degree it is around here.  Absolutely it can be atrocious with its personalities and at times feels like MTV when they started to get rid of the "Music" part, but at the same time show me a better sports channel.  Is the BTN full of amazing analysis?  I've caught two games on the SEC network and nearly lost my mind with the innanity. It's the nature of sports coverage, where people get way too invested in millionaires being paid by billionaires to play a sport that most of us have played for free numerous times in our lives.  I mean, there isn't a semi-competent news channel out there, and that is way more important than a Jays-Phillies game.

stephenrjking

August 5th, 2015 at 3:07 PM ^

I understand why people resent ESPN, but I don't agree with it. The biggest reason it's resented is because it's the big boy in the block, the "man." People always resent the man. And there are always things worth complaining about, because nothing is ideal. So people find the bad parts of ESPN, hammer them, and ignore any evidence that doesn't agree with them.

The problem is not ESPN; it is media. I seriously doubt the people griping about ESPN's 24 hour Sportscenter and opinion programming like the stuff on cable news networks any better; nor do they watch the competing content on networks like FS1 and NBC Sports, if the ratings are anything to go by. In fact, it is likely that ESPN is the only non-game sports programming that they ever do bother to watch.

The truth is that good non-game content is extremely hard to do well. Some shows/personalities work, and ESPN has a lot of them, but most don't. ESPN is just the most visible producer of it, so they get the criticism. But nobody enjoys the CBS NFL pregame show or the Fox Sports One highlights shows any better.

It's just griping about who is on top. Same way we gripe about Alabama football or Kentucky basketball, same way we griped about the Yankees or the Cowboys in the past.




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sdogg1m

August 5th, 2015 at 3:36 PM ^

Counterpoint.

I really don't care who the "man" is. I care about my wallet. ESPN is one channel out of hundreds and cable companies charge $40-60 for these packages. I was paying $40 a month for essentially five channels that I watch. This was not a good deal to me.

Cable was in trouble the moment shows started streaming their programs on the internet and then with the inclusion of hulu, amazon prime, and netflix. I never believed ESPN was worth $40 a month or even $8 a month. I could buy espn the magazing for roughly $1 a month and its not worth that. This is essentially ESPN's problem and employing the personalities they have does not help one bit. Also, I won't pay for the Big 10 network either.

I am trying to convince my parents to give up a bit of convienance for $1000 savings per year. I still haven't been able to do it. They see cable as a luxury that makes them apart of higher class of people. I just see it as a drain on my wallet that is not worth the value.

I cut the cord 10 years ago and thought why not see if my life will be fine without cable. I was wrong about my assessment, as it is in so many ways better. So great in fact, I think virtually everyone's life would be better without cable.

late night BTB

August 5th, 2015 at 4:24 PM ^

bravo, great write up.

I think this may be part of a generational thing.  Older people see things like cable subscriptions, cars, and tvs as status symbols and freedom.  

Younger people see the smartphone and mobile devices as freedom as now you don't need a car (Uber, etc) and you don't need a TV or cable subscription to watch shows or sports.  and younger people don't want to sit in a living room and watch TV, they want it on their tablet that can move around the house, or have going outside at the pool.

I cut the cord as well (5+ years), and my quality of life instantly improved. 

mgobleu

August 5th, 2015 at 4:30 PM ^

a part of a higher class of people..." LOL. I don't want to laugh at your parents, but I see a LOT of trashy houses with dishes on the roof and comcast trucks in the driveway.

I will agree with you on ditching cable; I gave up directv a year & a half ago, fully expecting to either go back or to dish by now, but I LOVE not paying that bill, and I don't just loaf around and "watch tv" anymore. I watch shows, meaning I have a specific thing to watch, I watch for 21-45 minutes, and I go on with my life. I highly recommend cutting tv out of your life as much as possible.

This is a major problem though, when it comes to sports. I'm more than a little surprised that companies haven't come up with more ways to accommodate people like me, but I think (hope) it's coming.

Doctor Wolverine

August 5th, 2015 at 9:02 PM ^

I just had somebody tell me today about how they pay extra to have cable in each of their kids' rooms, even though they are barely getting by. Their reasoning? It is one of the few "luxury items" they had as a kid, so they want their kids to have it too (I'm not saying this is a great way to think, just saying there are plenty of people out there who do think this way). For many people it makes them FEEL high class. Maybe that is why you see all of those Comcast trucks in poor neighborhoods.

uchi

August 6th, 2015 at 7:27 AM ^

Unfortunately there's a broke stigma around cutting the cord like it's only something tight wads or fresh college grads do. When in fact a lot of my recent grad friends never bothered with cable after college because they don't have time or care in TV. They have good jobs, they read, they travel. I think if we framed cutting the cord as a smart intellectual hard-working "I'm too busy for TV" thing, instead of the "Screw ESPN and Comcast--I don't want to pay $100/month--I have Netflix/Hulu/etc." thing, it might be even more popular.

AFMich

August 5th, 2015 at 4:05 PM ^

I also think some of the criticism is overdramatic. But I do agree with the poster above that said ESPN often feels like MTV after they stopped playing music. If I were king for a day, I would love to see SC run 4 times in a 24 hour cycle, live games, good investigative reporting/documentaries run as specials and recorded/obscure sports. I pine for the days I could watch lumberjacks or Aussie rules football. In short, I'd like the E to stand for everything, again. Stop the inane talk and over analysis.

Sac Fly

August 5th, 2015 at 2:53 PM ^

They have pretty much become the journalism equivalent of pop music. They pick a topic that's cool and beat it to death then beat it some more.

Eventually it runs it's course and they're still hitting it every single day. That's when they get front page stories about who Lebron James followed on Twitter and what Johnny Manziel's DJ name is.

Muttley

August 5th, 2015 at 5:03 PM ^

I try to watch the Fox Sports 1 sports news over ESPN when possible.  

As would be expected from any self-interested outlet, Fox Sports sports news is biased toward the games that are carried on the Fox Sports network.  OK, I get that, and often too much soccer coverage makes me switch to ESPN.

But I'm turning away due to lack of interest and not a repulsion in a Rosenberg-like faux morality play thats put on to make itself more important.

the_benjy_vortex

August 5th, 2015 at 2:04 PM ^

From an earnings perspective, DIS has been tearing it up over the last 8 quarters.   Their motion picture and theme park revs have carried the company.  Television has always been the albatross for DIS. The exception to that was the men's World Cup last year.  ESPN created record DIS revs from the advertising rights for that event.  Since then it has been a downward spiral for that division.

Sac Fly

August 5th, 2015 at 3:18 PM ^

His ratings are through the roof. First Take used to be nothing, but after they hired Skip I think they have the highest ratings of any program on ESPN2.

People love to tune in and argue with the guy.