ESPN to lay off nearly 4% of workforce amid changing pay-TV landscape | Hacker News Reader

ESPN to lay off nearly 4% of workforce amid changing pay-TV landscape

latimes.com

30 pointsmbesto56 comments

I don't know how related it is, but it does feel like the rich are getting richer.

In this case, because of the massive NBA TV-contract (9-year $24 billion with NBA-ESPN-TNT), the net losers out of this are not the millionaire players or executives, but the 4% workforce getting laid off.

So while it's all fun to say that Lebron James is getting underpaid, this new contract and the subsequent increase in salary cap means that you're not paying for the ESPN employees to do their job but giving it to the rich.

Who on earth would say LeBron James is underpaid? He makes $24 million in basketball pay, which is third in the league to Kobe and somehow Joe Johnson, plus god knows how much in endorsement deals.

The NBA has a salary cap, unlike the MLB. Some say it forces players like LeBron to play for less than they are worth.

"But if this offseason is any indication, max players are the bargains once again. Forgive me for sounding like a bad Internet headline — but you are not going to believe how underpaid Kawhi Leonard is, despite his new max contract. The same salary cap spike that’s made this free-agency period so wacky is shifting what the league’s players are worth yet again."[1]

[1]http://fivethirtyeight.com/features/kawhi-leonard-like-all-t...

http://www.npr.org/sections/money/2014/02/12/275922026/episo...

http://regressing.deadspin.com/how-much-is-lebron-really-wor...

http://www.sbnation.com/lookit/2013/5/1/4291088/lebron-james...

And many more...

It is generally agreed upon that in a salary capped league, and especially in basketball wherein a single player has a disproportionate impact on the outcome of a game, salaries are depressed in comparison to what teams would pay for his services on an open market. Lebron guarantees a competitive team no matter where he plays and significantly increased revenues and franchise values when leaving for Miami and returning to Cleveland.

I joke sometimes that its the intersection of nominally left/liberal American pundits with sports fans. The political blog Lawyers Guns and Money being a good example of it-people you wouldn't think would have those views, but when it comes to professional sports, all of a sudden self proclaimed socialists love themselves a free market.

It's not a love of the free-market that drives these conversations; it's a hatred of exploitive capitalism. Ultimately, the players are source of all the league's revenue, yet the have to split that money with the owners (who contribute almost nothing to the day-to-day revenue stream).

The players also have a strong union, which negotiates a number of protections for the players, from minimum salaries to safe work conditions, while allowing for higher compensation for key players.

So it is very reasonable for those of us on the left to be against the extreme labor exploitation represented by the salary cap.

Can players own a team instead of the traditional owner model?

Theoretically it's possible. Realistically no. The leagues vote on team ownership transfers, and they are unlikely to allow a sale that upsets their apple cart. Which is why only one team (Green Bay Packers) out of the big three sports is owned by a government body.

He makes more than double what Curry makes, and Curry has the same number of championships at Cleveland than Lebron.

LeBron was in 6 NBA finals and 5 of them straight, and has two rings. Curry has one. Robert Horry has more rings than Kobe, that does not prove one damn thing.

I didn't mean to drag the conversation down to this level. We can pick it up on espn where I feel more comfortable distorting facts to my advantage

A guy with an iPhone 6s can probably shoot the NBA game about as well as a high end camera in the 90s, shit, it even does slomotion without post-processing. If ESPN is going to pay Kobe Bryant[0] money for a 9 year TV contract, it is because the cable lines are already run, it is only going to get cheaper to produce and transmit this television, and the value of a game takes about a 90% haircut after 24 hours having virtually no rebroadcast appeal, except for playoffs.

This is a symptom of people doing more with less, rent collectors collecting rent, and the NBA beeing smart enough to lock this shit down. I mean, do you think cable television can make it 9 more years? Like, they still bundle a fucking phone in with that shit because voip makes it virtually free, but fuck if I am going to set up a land line for spammers to call me on. People like sports and watch them live so almost no one, at least no one I know, torrents the passed year and a half of Golden State Warriors games and binges them over a weekend.

[0]http://genius.com/48735

I think one of these professional teams are going to get wise and start putting their own cameras in their stadiums and start streaming the content. They own the content and can get it to the customer on their own terms. The technology is not a barrier anymore. This is going to get interesting in the next few years.

False. While most pro teams in major leagues other than NFL have local TV deals, the leagues control all of the national broadcast rights, including streaming services, and that's not likely to change anytime soon.

Actually the ones which are losing in this deal are the people who will pick the tab, in this case, ESPN's customers because they would finance the deal out of their pockets if ESPN decides to pass the costs as usual to the end customer i.e. cable TV users.

Regarding the laid off employees, as much as I hate to hear this but their loss is temporary and not permanent as long as they could secure another job soon and not burn the severance compensation or their savings quickly before landing the next job.

I think ESPN is destined to become the Netflix of second tier sports. MLB, NFL, NBA, and NASCAR will probably start being their own national contracts when the big [edit]four[/edit] stop being able to pay such high fees, and the little sports will be what ESPN has left.

Who will pay the majors the billions of dollars then?

I think they are going to have to go direct because I don't think the networks will have the money to keep up with those contracts. Both the NFL and MLB already have direct to the customer paid feeds.

The massive distractions allowed by the Internet, gaming, and the choice of what to stream is going to slice into those billions pretty deeply in the coming years.

That's what makes the theory of disruption so powerful.. someone will come and offer sports that don't have these restrictions with rights and pave an entirely new landscape of digital sports.

You mean Twitch and eSports? Or alternative leagues?

My guess is things like rugby could suddenly become popular if ESPN were to get the rights.

Rugby is regularly shown on ESPN, at least here in South America, and also in Europe I think.

We get it on saturdays in the summer sometimes, with no fanfare. I used to work for ESPN. They do the "ERT" trucks, aka espn regional TV, which is like the "C" team truck. Nothing like high caliber college football, etc.

Funny what made ESPN popular in the early years was their constant coverage of Aussie Rules Football. So many in the US were curious about it and helped ESPN grow. I'm sure other sports were a factor too.

Too bad ESPN dropped coverage of that sport - I used to pretend I was an Aussie trying to bounce the ball and catching it and kicking etc with friends who had ESPN as well.

https://en.wikipedia.org/wiki/Australian_rules_football_in_t...

    D I G I T A L   S P O R T S

It's already a thing. Twitch is massive, and seemingly profitable. They're not the best company but they're providing a platform for millions of people to watch online events in traditional games (chess, poker) as well as eSports (called digital sports by some companies).

It might explain their incredibly large investment into College Football. Even other networks use ESPN to schedule games, and they own the copyright to some conferences even if they don't broadcast the game themselves.

Cutting out middle men seems like a no brainer, but it doesn't work out in reality too well. See wholesalers. They just provide too many value added services, including pricing buffers (bundling).

For the big sports, I don't think ESPN will provide the extra value. Particularly when you have the MLB able to provide expertise to other sports. I do see them providing value to second tier sports and events. The money for ESPN to pay the big contracts will just not be there.

Similar idea, but since MLB has its Productions service, things might become more monopolized through them over time.

If I remember correctly, the NHL is already using them as a provider for online streaming (as well as HBO Go for that matter).

...and WWE if I remember the press. An important difference is the MLB effort is more of an infrastructure play / turnkey solution versus an actual network. They don't provide content, just capability.

True. Interesting change in direction though for how things are changing.

I think it showed great vision on the part of MLB. If you are going to build a platform for delivering your content, you might be a platform provider for the same. Strikes me as taking the lessons of Amazon and AWS to heart.

I think that should be a goal for many situations. If you can build a high-quality tool/platform/etc. for yourself, then you could, eventually, share it.. especially if it's better than the typical alternatives.

Why don't they fire everybody involved with SportsCenter and just show sports instead?

You're getting downvoted but you're not far from the truth. I fail to see how ESPN couldn't just charge the consumer more than they charge the cable companies, but hand out their channels ala cart and show more sports.

Most people who currently pay for ESPN (as part of cable TV bundles) would not pay for ESPN by itself. The price for actual viewers would end up significantly higher than the current $15 rate.

So what you're saying is ESPN is doomed to a slow death as more people cut the cord and no longer subsidize ESPN viewers (who won't pay what it actually costs).

Good riddance!

SportsCenter is one of the high margin show on the network[1]... this isn't by any means the cause of the reduction in workforce.

[1] http://www.wsj.com/articles/espn-tightens-its-belt-as-pressu...

Part of the reason this is unappealing to consumers is there are actually two layers of bundling here.

One layer is the obvious cable TV bundling that most of us probably think is evil and should die.

But the second layer of bundling is ESPN itself. How many people care about "sports" in general, enough to pay for all the sports? No, people usually are into a couple of sports at most. They like baseball, or they like basketball and football, or they like the other football, etc. Or even, they like specific players.

I think there is a future to be had in selective channels available on the internet that cover specific sports in much greater detail than ESPN ever would.

All of those things are symptoms of the real problem; the professional sports organizations (NBA, NFL, NHL and MLB). These guys call all the shots regarding who gets to see what and when and how much it costs. I've never seen the LA Kings play because I live on the east coast and the NHL doesn't allow their games to be broadcast here. They are greedy and restrictive and the primary cause of sport broadcast woes.

I have another bone to pick with them as well. They've chopped up professional sports and sold it to the advertisers. Fucking everything in a sports game has a company's logo on it. I went to a baseball game the other day and Home Hardware was sponsoring the field clean up crew. Are you kidding me? The fucking field janitors are wearing logos now? They ran out of things to stick ads on so literally anyone involved in the game in any capacity is wearing a logo. Baseball has turned into a thin excuse to serve ads to people.

No kidding. I was trying to watch some soccer games in England last month, and it was an exercise in having to fight through the flashing+animated ads around the entire field. I don't think I will ever try watching one of those matches again.

I wonder if a pay per view model might work out.. For example to watch a certain game you pay 99c. If you want to watch live you pay a premium $1.99. Possibly special games (Superbowl, world series, nba playoffs) go to $2.99 a game.

Obviously selling TV shows and movies by the drink does work as (part of) a business model. However, I would posit that a lot of people watch sports games pretty casually. They catch a bit of the baseball game while they're eating dinner or whatever. Some sports certainly work PPV (boxing being the clear historical example). I'm guessing football might do OK as well. But you'd really cut back on the audience which would mean a lot fewer ad dollars too.

It'd be really interesting to see what the network sports programming gets per viewer from the advertisers (I think they aren't capturing any cable money). Maybe that information is available, I don't know where to look (I guess the Superbowl numbers are pretty public and would establish a ceiling). Those numbers should more or less show what it costs to put together the programming and would make it easier to reason about how many viewers they need at a certain PPV price.

I had an NBA League Pass subscription last year, and it was absolutely fantastic and WAY better than the cable offerings (even if I paid for every single extra).

However, it's too expensive for me (I had it as a gift).

Pay per view might work, but there is zero chance it would cost $1.99. Right now ESPN is effectively subsidized by cable bundles, so if that all collapses expect sports to get a lot more expensive before they get cheaper.

I'd love to pay $5/mo or something and get live motorsports racing, preferably most with commentary, and a slick archive of previous broadcasts. And it has to work on Linux without Flash.

And I want a pony.

Doesn't sound unreasonable at all. The tech is here, and cheap.

What's missing is a startup with deep pockets to start buying contracts.

One can hope that Skip Bayless and Stephen A Smith are part of this. I kid, I kid, but seriously there's a large amount of sports fans looking for alternative sports news.

They can start with everyone who is involved in translating sports stories into emoji.

Considering that I was forced to pay $60 a year to support this channel that I never watched while I had cable - ultimately being one of the reasons I ditched cable entirely - I can't get too broken up over this.

Please, please have Stephen A. Smith be one of the people laid off.

As someone who has never in his life turned on the TV to watch an athletic competition, not even once, I greet this with the applause and cheers I never directed to the screen for some ball game.

It's not that I mind those who like sports having the opportunity to watch them — that's a-okay — what I mind is that I and those like me have to subsidise them through cable fees, sports stadium taxes, tuition and the visual and attention pollution attendant on major-league and collegiate sports.

If they offer an Apple TV subscription I would pay them $5 a month.

Reply on news.ycombinator.com