Despite outrage, Grantland’s shutdown smart financial move
Last week, ESPN announced via a press release they were shutting down one of its most popular alternate sites: Grantland. The site was created by former ESPN employee and popular journalist Bill Simmons and featured stories from over 30 other notable journalists.
The decision to axe the site was met with overwhelmingly negative reception from the journalism and consumer community.
Roberty Lipsyte, a former ESPN employee, was particularly harsh on ESPN for closing down Grantland. He called Grantland “ESPN’s home for actual sports journalism” and “a beacon in a field of sludge.”
Despite the enormous outrage the site’s shutdown has received, in a time when ESPN is attempting everything they can to cut costs regarding ESPN, shutting Grantland down makes perfect financial sense.
Grantland was created in 2011 when Bill Simmons convinced ESPN higher-ups to create a new site focused on pop-culture and sports yet journalistically. The site’s appeal would reside in its laid back yet in-depth style and content.
In the spring of 2015, Simmons was suspended for the second time in a year for criticizing the NFL. This suspension brought growing tensions between Simmons and ESPN to a head and his contract was not renewed, leading to an ugly divorce.
After Simmon’s was fired, it seemingly set a ticking clock before Grantland was the next casualty. Not only because the site lost its founder and editor-in-chief (although that was one of the main reasons) but because of ESPN’s financial situation.
ESPN lost seven percent of its subscribers in the past four years as a result of a practice called cord-cutting. Cord-cutting offers a customized alternative for consumers to choose what channels they want to watch and cut the ones they never watch, namely ESPN.
While this is a bad enough situation, it is made even worse by ESPN’s live-sports airing prices. Over the past three years, ESPN has had to double most of their television deals and for some go even higher:
As a result of losing money from subscribers while having to dish out more money to keep your product, ESPN was forced to lay off 300–350 employees in the past few weeks. But it wasn’t only employees being laid off.
Since Bill Simmons has left, he established his own podcast and is currently negotiating with HBO for further opportunities. What is very striking is Simmons’ estimated yearly revenue from the podcast: $5 million. Grantland’s estimated yearly revenue: $6 million. The podcast of one journalist makes almost as much as a site that requires ESPN to employ dozens of writers.
During an interview at the Vanity Fair conference, Simmons admitted the site’s revenues and financial problems combined with paying employees the site was struggling to make money:
“It was probably like right around even,” he said. “This is probably going to sound like sour grapes, but so much of it has to do with the priorities around how you sell stuff, and we were a boutique site . . . Our issue is that, when you’re a small site, you have to do quick deals. We didn’t make any money off podcasts, which is crazy to me . . . that was definitely part of the reason I started having issues.”
While the financial problems are one of (if not the primary) key reasons of Grantland’s death, the seeds were laid down far before Simmons’ relationship with ESPN began to deteriorate. Business Insider reported in October of 2014 that Grantland was struggling to match traffic from other sports sites which was particularly troublesome given its relationship to ESPN:
According to ComScore, Grantland reached 4.8 million people in August 2014. That’s pretty small compared with the 25 million people the Gawker Media sports website Deadspin reached in the same month. Grantland grew 19% year-over-year. Deadspin grew 303%. The audience of another competitor, Vox Media’s SB Nation, was 13 million.
The comparison is especially ugly for Grantland when you consider that it gets a lot of traffic from ESPN.com, a web giant with roughly 200 million monthly unique visitors.
In conclusion, while Grantland was one of the more universally loved sports sites out there, it simply wasn’t business efficient enough in a shifting economic environment to continue to thrive. ESPN has decided to keep its less-loved programs such as First Take because it creates controversy and controversy sells.
Is it wrong that a journalistically focused and driven website was put second behind financial success? It doesn’t matter. Grantland is dead, hundreds of employees were fired and ESPN’s future is looking vastly different than its present.
