The four-letter network’s Red Wedding from last Friday had a loose sense of finality to it. That’s not the case.
Beyond the name or two that trickled out since nearly 20 on-air talent were let go on June 30, there could still be more. That’s because one of ESPN’s most prominent voices says there will be more.
“This ain’t the end, more is coming,” Smith said recently on his self-named show, via Armando Tinoco of Deadline.com. “And yes, ladies and gentlemen, I could be next.”
Smith made two significant declarations, in one sound bite. First, “More is coming.” How many more are coming? And when are they coming? He didn’t say. But it obviously makes sense to keep paying attention.
Second, Smith says he could be next. That would be a shocker, given ESPN’s current focus on paying for star talent, especially those that work extremely hard. Smith is both. If he’s not safe, no one is.
The fact that he’s worried about it makes it less likely to happen. He’s staying focused and motivated. He’s taking nothing for granted. That mindset is valuable — it helps prevent giving those who make big-picture financial decisions from ever deciding to get rid of the person who remains focused and motivated and takes nothing for granted.
Smith added that the people who were let go “deserved better,” before explaining that “it’s not Disney or ESPN that they deserved better from, they deserved better than the times we’re living in.”
That very well could be the internal justification that management is selling to justify the moves. If so, it grossly oversimplifies the situation. Whatever the broader economy is doing (and frankly who the hell knows), what matters is how a given corporation is doing.
For those who push the buttons and pull the strings, the employees are interchangeable pawns. Layoffs implemented under the guise of “the times we’re living in” or whatever they say to excuse it flow from the specific dynamics of the corporation choosing to make the cuts. Someone develops a vision for increasing profit, which is the primary mandate for any publicly-traded company.
Sometimes, “the times we’re living in” provide convenient cover for simply trimming fat. Sometimes, a corporation is experiencing challenges inherent to how its business previously generated profit, and how it will be generating profit in the future.
Disney is currently caught squarely in the crosshairs of cord-cutting. In lieu of having money-for-nothing subscription fees buried into cable and satellite packages that included umpteen ESPN channels that most of the people who were paying for them never watched, ESPN is moving toward a model that generates revenue only from those who want its content. The slow pivot of households having ESPN (and paying for it) because that was the only way to get the channels they actually watched to only those who want ESPN enough to specifically pay for it continues. At some point, ESPN will indeed leave cable/satellite entirely and become a direct-to-consumer product.
ESPN won’t fail, but it also won’t be printing money the way it once was. It already isn’t, and Disney is adapting to the changes that have occurred and preparing for more of the same.
To the extent that’s what Smith means when he refers to “the times we’re living in,” he’s right. At all times, Disney needs to maximize profit. Disney needs to construct its businesses in a way that will be as profitable as possible. Business considerations drive all of it. And few businesses have been or will be impacted more by cord-cutting than ESPN.
That’s the heart of it. ESPN has gone from a slew of channels that every cable/satellite customer paid for even if they never watched to a destination that must be specifically selected and purchased, like most other consumer products. There’s no longer a giant pot of unlimited money to support an army of hosts, analysts, reporters, etc.
While those who lose their jobs over it are being negatively impacted by “the times we’re living in,” it’s a basic consequence of consumers benefiting from these changes. We no longer have to pay for channels we don’t watch in order to get the ones we do. And companies that were flush with cash from people who had to pay for things they didn’t want must now adapt and adjust.
Thus, whether Smith was referring to the short-term or the long-term, Smith is right. More is coming. It’s part of the seismic shift in consumer flexibility that necessarily impacts the company that profited the most when millions who never watched ESPN were paying for it, month after month and year after year.
