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5 Strategies Behind ESPN’s Layoffs/Growth of the Organization

With technological enhancements and changing consumer trends, any organization must adapt in order to thrive and survive. Unfortunately, that evolution process involves making extremely difficult decisions, such as cutting costs and laying off loyal and hard-working employees. ESPN just made that excruciating decision by letting go of 100 writers and on-air talent on April 26th, many of who had been working for the organization for over a decade.

In terms of public relations and human emotions, ESPN’s decision caused a massive uproar, especially on social media. Media members’ support each other and anyone who has worked in this industry knows that people sacrifice weekends, weeknights, and precious family time to cover sports. While working in sports media is a dream job for many people, it also results in increased competition, high rates of turnover, and constant change within the industry.

Much speculation has risen on ESPN’s leftist political agenda contributing to a loss in subscribers. These accusations may contain some truth but miss the larger point. Due to rapid technological progress and more entrants into the industry, an established network like ESPN, which began in 1979, has had to continuously manage its business model to meet consumer demands. The network has stood the test of time and still remains the most-viewed and highest revenue generated platform among sports media companies. Thus, here are five strategies ESPN has used to grow the organization amidst the recent layoffs:

1. Content Evolution as Consumers Change Viewing Habits

Social media platforms, notably Twitter, Snapchat, and Facebook, have created a stage for people to instantaneously post, review, spread, and analyze news. Unlike in the past, when people had to view content on newspapers and websites to receive their information, anybody can receive their news just by going on social media. Sure, media companies usually link their stories through social media platforms but the need to post detailed news on any topic has gradually evaporated.

With the exception of a select few world-class reporters who break the most popular news, like Adam Schefter/Chris Mortensen of ESPN and Adrian Wojnarowski of The Vertical on Yahoo Sports, reporting news has become devalued (ESPN has paid a premium to hire Wojnarowski from Yahoo Sports; his consistency in breaking the most basketball news has made him an exclusively rare exception for valuing reporters. In fact, Wojnarowski’s popularity has grown to a point that his 2016 NBA Draft Day podcast nearly attracted as many viewers as ESPN’s coverage). People do not have to click on a website to obtain news, which drives down traffic, and news easily spreads between organizations. Among the many layoffs of ESPN, several writers, on-air anchors, and reporters across all sports got relieved of their duties. This had little to do with the individual’s job performance but rather the diminished need for personalized reporting and writing factual content that most other people can do.

Many different organizations send their own sets of people to watch and cover a major event and with the TV product getting better by the day and more people having access to real-time statistics, the value of sending many reporters to a game dwindles. Casual fans can provide their own stats and analysis on the game from afar. Unless that network is telecasting the event, in which it receives exclusive access to different interviews and behind-the-scenes footage, investing money in people to cover the games live does not separate the network from its competitors; every organization has the same access to player/coach interviews and action on the playing surface.

As more people watch some of the premier games on multiple screens, with one full screen dedicated to social media and/or game analysis and stats, sports media reporters and writers have become dispensable. Unless people offer up something extremely useful, media presence at games does not carry much value. Local media personnel along with reporters from other major media networks already attend and watch the same game from the same place in the press box. The media has evolved from newspapers to radio to TV to the Internet to mobile. A change in landscape calls for a change in roster, even if that means cutting beloved figures.

2. Greater Investments in Developing Technologies

Over the past decade, several new sports media platforms have formed to compete with ESPN. These range from new cable channels like NBC Sports Network and Fox Sports 1 to online multimedia platforms Bleacher Report, Barstool Sports, 120 Sports, and Outkick The Coverage. Sports Illustrated has also gone through a major makeover and developed a quality website. Every major American sports league — NBA, NHL, MLB, and NFL — has its own 24/7 sports network with the most access to any footage associated with that respective sport. All of these organizations also have a corresponding mobile application, such as Bleacher Report’s Team Stream, which allows people to literally view the content anywhere at any time.

To stand out from the competition, ESPN cannot rely on its brand alone. After all, others will continually keep degrading this company in order to promote their own respective platforms. That’s all part of the competition for listeners, viewers, and readers. Instead, ESPN has decided to enhance every part of its platform and maintain as technologically proficient as possible. Any product that constantly innovates for the better and adjusts to the environment will have a model to succeed well into the future.

For its biggest telecasts, notably the marquee college football games, Monday Night Football, and the most anticipated NBA matchups, ESPN has a remarkable list of high-tech cameras. For the 2016 NBA Finals, ESPN utilized over 40 cameras, with high-speed cameras positioned throughout the lower bowl, and included super slow-motion cameras from several angles and five different mobile production units. ESPN unveiled the Sony HDC-4800 4K 8X camera for that series, which produces cinematic slow-motion drama in real-time. ISO cameras specifically followed the marquee players during the games, and 360-degree cameras sponsored by Intel provided a full-circle replay look on some of best plays of the series.

Since football has a much larger playing surface and more players on the field, ESPN deploys over 50 cameras and 60 microphones for its largest football telecasts. These include cameras instilled in all eight of the pylons in both endzones, multiple skycams placed in the middle of the field, and several high and low angled 6X super slow-motion cameras. Virtual Reality cameras from the quarterback’s point of view, as Fox Sports displayed during Super Bowl 51, will likely be incorporated in the near future as well.

By using the most advanced cameras and a large quantity of them on live telecasts, ESPN has all the resources to create a cinematic experience from the game telecasts. The most prestigious basketball and football games often get replayed and/or used again for future post-produced features and documentaries.

Along with live events, ESPN spent $125 million on a completely new and futuristic studio set that includes 114 monitors (compared with just 15 monitors in the previous set). It includes 1,100 miles of fiber optic cable and 247 miles of copper cable to keep up with the speed and quality of the digital postings. The enhanced studio allows ESPN to show any social media and video clippings in real-time, connect with people for interviews anywhere in the world, and cover topics at much faster speeds. Instead of inefficiently using people to move around the studio sets, the enhanced studio allows for much greater visuals and flow throughout any show.

One more major evolution ESPN has made involves the reconstruction of espn.com. The company redesigned the website to personally engage each user, as it caters all of the content related to a person’s “favorite teams” right on the front page. It also includes more videos, a full list of all of ESPN’s features, and real-time summaries on live events. The web version is more complex with three different columns while the mobile version allows for a single column that provides the users with the most relevant information.

3. Using TV for Debate/Analysis and Digital Media for News/Highlights

Just a decade ago, some of ESPN’s largest studio shows, including Sports Center, Baseball Tonight, NFL Primetime, and NBA Tonight, received their popularities from highlight-based formats, which recapped the games through video storytelling. Now, due to the emergence of online media, people can view the highlights of any game online (or on tablets) at their convenience instead of waiting for a particular time period during a TV show. Along with each league’s improvements in posting all game highlight videos on its digital platforms, ESPN’s value for incorporating game highlights on its TV show has disintegrated.

As a result, ESPN has placed greater emphasis on discussion-based shows. Showing highlights of the same games can get really old and tune out viewers after a short time. Debate shows, on the other hand, provide different points of views from different characters. The morning show, First Take, averages over 500,000 viewers per morning show; ESPN moved that show from ESPN2 to its main network to gain more traction. The rest of the daytime lineup includes almost all-debate programming, including SportsNation, Pardon the Interruption, Around the Horn, The Jump, Highly Questionable, and NFL Live.

Instead of traditional reporters, ESPN has offered far greater value towards on-air personalities and people who debate well in front of the camera. Outspoken figures like Dan LeBatard, Mike Golic, and Stephen A. Smith all have lucrative contracts with ESPN, while the network made big pushes to retain Skip Bayless and Colin Cowherd, both of who ultimately left for Fox Sports 1. Like it or not, bold personalities attract viewers and in an increasingly competitive landscape, receiving viewers trumps anything to do with “quality journalism” or “valued analysis”.

TV and digital media have two completely different sets of purposes in the modern landscape. Digital viewing consists of more shorter content, where people can view exactly what they want when they want, while television consists of longer viewing periods, where entertainment value and debate quality correlate with viewers staying tuned in. Instead of constantly rotating anchors, ESPN has designed the combination of Jemele Hill and Michael Smith (6 PM ET Sports Center) and Scott Van Pelt (11 PM ET Sports Center) as the designed faces of the network. Hill and Smith exhibited great chemistry with each other on their previous show His and Hers, which had stellar TV ratings, while Van Pelt’s versatility with various elements, including on gambling, interviewing players right after games, and ability to give monologues, deemed him a good fit for the primetime slot. ESPN rightfully prioritizes the people most responsible for attracting the largest audiences, so investing in polarizing on-air talent, no matter the controversy surrounding these people, is the most logical way to thrive in this platform.

4. Double Down on Content ESPN Provides

ESPN has not broadcasted hockey since 2004, surrendered almost all rights to major international soccer games (both club and country) to other networks, relinquished NASCAR broadcasting rights in 2014, and only airs The Masters in golf after NBC took away The British Open broadcasting rights in 2015. With more sports media companies around, it makes little sense to waste valued resources on covering sports that does not directly benefit the network. To receive news and updates on certain leagues, people can flock to those media organizations that actually telecast those sports.

Thus, ESPN has appropriately decided to double down on its basketball, college football, NFL, and tennis coverage. MLB Network, TBS and Fox Sports air all but one MLB postseason game and another marquee national regular season games, so ESPN has decided to significantly reduce its baseball coverage. In fact, it will simulcast studio shows produced by MLB Network, which has allowed ESPN to part ways with some baseball analysts, including Doug Glanville and Dallas Braden. Along with baseball, ESPN has dramatically reduced its coverage of sports like hockey and soccer, since the network does not telecast major games in those respective sports.

For the most part, ESPN has increased overall coverage on the NFL, college football, and NBA. Most of the daytime programming on ESPN involves debate topics from these respective sports, while the network will likely continue to have longer pregame shows prior to some of ESPN’s biggest events.

That makes sense, as the popular studio show College Gameday attracted its largest audience ever of 2.6 million viewers prior to the Michigan-Ohio State football classic this past November. Monday Night Countdown received almost 3.5 million viewers on some nights, while Sunday NFL Countdown, which did not precede any NFL games, suffered through difficult ratings. Other networks, such as Fox NFL Sunday and The OT before and after NFL games in the fall, provided Fox Sports with two of its highest-rated shows of the year. Ditto with NBC and hockey shows and CBS/Turner with the NCAA Tournament studio shows. Pregame studio shows work effectively since viewers can anticipate the games about to come on air.

Surely, ESPN did cut some well-known NBA (Marc Stein), college basketball (Andy Katz), NFL (Ed Werder), and college football (Ted Miller) reporters. These reporters covered sports that ESPN extensively covers. However, most of the people that ESPN relieved either provided more niche/regionalized coverage or reported mostly factual news, both of which do not provide much value to ESPN. Personalized reporting on certain teams forces a national media outlet to unnecessarily compete with local reporters, who often have a stronger connection to their regionalized audience. Certain exceptions apply, such as a global icon LeBron James who has developed a nationwide following; naturally, ESPN kept all of its reporters associated with James, since that coverage has continuously received strong interest around the country.

Furthermore, interactive games like fantasy sports have become widely popular on the platform, as ESPN claims that over 7 million unique users used its fantasy sports mobile application in 2016. With so much popularity, ESPN kept almost everyone associated with fantasy sports and may even continue to add people to that staff. Ditto with gambling picks and analysis, as many viewers get motivated to watch a game because they have a stake in the outcome. Illegal gambling throughout the country has reached preposterous heights and engages audiences in a completely unique way; gamblers tune into a program to receive the most insights into making calculated bets. Thus, ESPN must tailor its staff towards its viewers, and fantasy sports and gambling provide a very engaged audience that the organization simply must accommodate.

5. More Money in Original, Long-Form Stories

The barriers to entry for people to freely express their opinions online have fully evaporated. Anybody can obtain a nice following through a series of blogs or tweets that do not require traditional journalistic ethics. Unfortunately, quality journalism does not necessarily directly correlate with a strong interest and without consistent readership or viewership, an online media company cannot thrive amidst the competition.

Instead, ESPN can separate itself from all other platforms by developing original features and stories that nobody else can match. The network certainly has the resources to pull this off and is why it has built up original platforms like The Undefeated and DoubleTrack, both of which have long-form original stories on unique topics. Video stories on E:60 and Outside the Lines also contain unique investigative and thorough information that few other sports platforms can afford. It takes significant investments in research, travel, camera production, and post-production to make a quality feature or documentary, but ESPN has the resources to pull this off.

Video features and long-form original journalism engage viewers and readers in a different way that traditional op-ed and news articles cannot match. ESPN’s acclaimed documentary OJ: Made In America, which won an Oscar for Best Documentary Feature, received 3.4 million viewers in its first episode and millions of other viewers through online viewing. Currently, ESPN is airing eight episodes of We The Fans, which follows the diehard Chicago Bears fans during the team’s dismal 3–13 season in 2016. Both of these shows are part of ESPN’s 30 for 30 series, which showcase deep, comprehensive stories on some of the most intriguing topics in the sports world. The organization has already published over 85 full-length 30 for 30 documentaries and another 60 ESPN Shorts, which are shorter-length features.

Original stories can often have extremely long lifespans — unlike game stories and analysis — so a good show or long-form article can be viewed well after it has been published. ESPN posts its most recent features, documentaries, and shorts online on WatchESPN and sells DVD’s for its long-form video documentaries. Only ESPN subscribers can view content on WatchESPN and despite the high costs associated with long-form journalism, ESPN can greatly benefit from well-produced storytelling. The better the quality of the feature, the greater chance that more people will view that story, which ultimately means that more people will continue to subscribe to ESPN or buy the DVD documentaries.

Parting Thoughts

Yes, ESPN has certainly made some questionable financial decisions in the past that it would do over again, such negotiating a better deal on NFL coverage, where it pays the league $2 billion to telecast 17 Monday Night Football games and one wildcard playoff game. The sports giant also likely became overstaffed when the network seemingly felt invincible with over 100 million subscribers in 2011 and over $650 million per month in subscription revenues. However, ESPN still remains a juggernaut in the sports media market and is a very forward-thinking company. ESPN has made improvements to its production quality, studio sets, website layout, and the WatchESPN application that have allowed the organization to stay afloat.

More competition will drive a change in business strategy and that process usually requires a major change in staff to accommodate the necessary skill sets. Some skills, like individualized reporting, anchoring, and writing analysis articles, have become devalued in the digital media market with the growth in competition. Many production roles, such as graphics coordinators and technical directors, will likely become automated in the very near future, which will further transition the job market in the industry. Online storage on the cloud will only expand, which will eliminate devices like external hard drives. Transferring video from one location to another will only get easier and will likely eliminate the middle man. As technology improves, certain jobs become outdated, and media companies can accomplish more with less.

For individuals, the evolving technological landscape places far greater importance on value and versatility. Behind-the-scenes people must be able to understand, execute and adapt to the most up-to-date production skills, while on-air talent must continuously engage the viewers through every digital media platform and understand how to operate the newest technologies. People must evolve their skill sets to remain in commission.

Because of the power of technology to eliminate many inefficient job positions in production, media organizations can then utilize most of their resources on obtaining broadcast rights for live events, constantly improving technology, and investing in original pre-produced programming. In the very near future, the traditional major media networks (ABC/ESPN, Fox, NBC, CBS, Turner) will face increasing competition for streaming rights with online powerhouses like Amazon, Facebook, Twitter, and Google. The increased competition will drive rights fees even higher in the coming years; look no further than the NFL deal, as Amazon paid five times the amount as Twitter did last year to obtain the streaming rights for 10 Thursday night games in the 2017 NFL season.

Securing rights for live events remains the top priority for ESPN, as popular sporting events like college football and NBA games give many people a legitimate reason to subscribe to ESPN. With the increased competition, sports leagues hold almost all of the power in determining who will telecast the games. If ESPN’s production performance falls below expectations, the network risks losing broadcast rights and without live games to offer, fewer people have a reason to subscribe to ESPN. Hiring people and developing technologies that ultimately provide ESPN with the best possible game telecast, along with the pregame/postgame shows, will keep the sports media giant ahead of the curve.

Original pre-produced programming, such as the 30 for 30 series and Outside the Lines features, and debate shows on television both serve as complements to ESPN’s arsenal of live events. The network can center its entire day-time programming on debate talk shows, which places a premium on finding on-air personalities that attract the most viewers. Quality feature and documentaries further accompany ESPN’s live programming, since it offers original information to people. As Netflix and Amazon have shown, people will pay for quality, original content, so good long-form storytelling can acquire more subscribers for ESPN.

Overall, ESPN’s change in staff had much more to do with an evolving environment than a sign of poor performance. Any adaptation phase involves some incredibly difficult decisions and for ESPN to keep up with the current viewing patterns and technologies, the network had to invest its resources in areas that added value to the organization. More competition exists now than ever before, so what worked in media yesterday will likely not suffice today and tomorrow. In an industry that relies on attracting the most viewers and subscribers, ESPN must continue to invest in ways that keep people engaged with its platform, even if that involves letting go of some good, genuine people. It’s the only way to survive in media.


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