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ESPN Down 7 Million Subs Since 2013

30 Nov, 2015 By: Erik Gruenwedel

Loss represents about $42 million less in monthly revenue

ESPN’s inclusion in several upstart online skinny TV bundles was partially explained Nov. 25 following parent Walt Disney Co.'s 10K fiscal filing.

In the filing, Disney disclosed pay-TV’s flagship sports network has lost 7 million subscribers since the same filing in 2013 — including 3 million subs jettisoned in the past 12 months. ESPN ended the fiscal year with an estimated 92 million subscribers. ESPN 2 also lost 7 million subs.

The Disney Channel lost 4 million domestic subs since 2013 to end the period with 95 million — including 2 million subs departed since last year.

The ESPN declines are significant considering it commands an outsized retransmission fee ($6.04 per subscriber in 2014) from pay-TV operators, according to The Wall Street Journal. Runner-up TNT generates $1.48 per sub. Meanwhile, ESPN 2 gets 74 cents per sub, and Disney Channel, $1.21.

The sub losses represent about $42.2 million less in monthly ESPN revenue since 2013 and have contributed to about 300 layoffs at the network.

Disney CEO Bob Iger in the company's third-quarter (Aug. 4) fiscal call alluded to modest subscriber losses at ESPN — a revelation that at the time triggered an industry-wide stock selloff among publicly held media companies.

Iger attributed the decline in part to cord-cutting among pay-TV subscribers, notably the millennial demo he said is increasingly eschewing the traditional cable bundle for less-expensive (and sport-free) over-the-top video.

At the same time, Iger refused to concede that taking ESPN direct to the consumer via OTT was a good idea.

Yet, ESPN in February for the first time became a quasi standalone service when it joined Dish Network’s broadband-only Sling TV. It is also part of Charter’s broadband-only Spectrum TV and Time Warner Cable TV, the cabler’s beta-testing subscription streaming service. ESPN has a lawsuit pending against Verizon after the telecom offered the sports network on its skinnier pay-TV bundles.

“The multichannel universe … is still the dominant form of television viewing. It is clearly the dominate form for sports viewing as well,” Iger said. “When we look at that [MVPD] universe, we don’t really see dramatic declines over the next five years. We just don’t think it’s necessary [rolling out ESPN separately],” Iger said.

About the Author: Erik Gruenwedel

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