ESPN assures advertisers it's responding to cord-cutters: 'We're making changes'

ESPN assures advertisers it's responding to cord-cutters: 'We're making changes'
ESPN on-air personality Kenny Mayne makes a pitch to advertisers during the sports network's 2017 upfront sales presentation. (Joe Faraoni / ESPN Images)

Sports media behemoth ESPN has been taking some tough knocks in the press and on Wall Street lately for losing cable subscribers to cord-cutting and laying off more than 100 editorial staffers.

But, like an impassioned coach's speech in the locker room at halftime, ESPN President John Skipper made a case Tuesday for the continued vitality of his business during the network's upfront sales presentation to advertisers at the Minskoff Theatre in New York.


"ESPN is responding to change and we're making changes from the most dramatic position of strength," he said.

Even with fewer subscribers, Skipper noted that ESPN reached 210 million viewers last fall, a new record for the channel, and saw its prime-time ratings increase 15% in the first quarter of 2017 compared with the same period a year ago. (The ratings reflect the number of people who are actually watching ESPN; not everyone who gets the channel in their cable bundle will necessarily watch it.)

Skipper got the good news out to the audience of ad execs who have probably heard the bad news that has haunted the Walt Disney Co. unit in recent years. A growing number of Americans are ditching cable and satellite subscriptions to watch video online. As the network that commands the highest subscriber fee in the TV business — an estimated $8 a month per subscriber — every cord-cutter represents lost revenue.

ESPN has lost an estimated 9 million subscribers just since 2013. Wall Street analysts have highlighted the subscription losses after every Disney earnings report, even as the company's stock continues to perform well.

Skipper countered that ESPN is making up some of those losses through "over-the-top" TV offerings that provide streaming video channel subscriptions via the Internet. ESPN channels are included on services offered by Hulu, Sony, DirecTV and YouTube.

ESPN's fees for such services are comparable to what it receives from cable and satellite distributors. Streaming outlets also extend ESPN programming to those without cable or satellite service.

"This is good news for our ecosystem," Skipper said. "It makes ESPN and the advertising model stronger."

ESPN's presentation emphasized the network's continued efforts to turn its signature news program, "SportsCenter," into a more personality driven franchise as game results and highlights are more readily available online. For the second year in a row, "SportsCenter" late-night host Scott Van Pelt appeared on the upfront presentation stage to tout that he has the most watched TV show in his midnight time period among men 18 to 34.

ESPN has taken its 6 p.m. Eastern "SportsCenter" in the same direction, with co-hosts Michael Smith and Jemele Hill mixing their interest in pop culture and social issues into the program.

The push for more personality will expand to the morning starting in January. The network announced that Mike Greenberg, part of the ESPN Radio team Mike & Mike, will host a new live daily morning program on the flagship TV network. Greenberg's show will broadcast from a New York studio instead of ESPN's headquarters in bucolic Bristol, Conn. It will air live from 7 to 10 a.m. on ESPN and re-air each day at 10 a.m. Eastern on ESPN2.

Skipper also noted that the network has boosted its commitment to sports journalism by increasing the frequency of its news magazine "E: 60," hosted by Bob Ley and Jeremy Schaap, to a weekly time slot on Sunday mornings.

While recent layoffs — triggered by the pressure of declining subscription revenue and steep rights fees for live-event programming — meant the departure of many well-known names at ESPN's properties, the network filled the stage with more than two dozen of its personalities onstage.

Asked if that portion of the presentation was a response to the news about recent layoffs, President of Global Sales and Marketing Ed Erhardt said, "We think the picture speaks for itself."


Twitter: @SteveBattaglio