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Soulful to soulless: Former ESPN employees blame overspending, Disney for layoffs


By Michael McCarthy

@MMcCarthyREV
Published on Oct. 28, 2015
One week ago, ESPN unceremoniously laid off 300 employees, many of them well-regarded producers, programmers and editors at the peak of their talents and careers.

Now that the headlines and press releases have faded, reality is setting in. ESPN is cutting loose these often middle-aged executives. Their career prospects may be bleak in a sports media industry riven by cutbacks, ageism and shrinking cable TV audiences.


MORE: Who should have gotten laid off at ESPN? | Stephen A. Smith gets the nod

Howie Schwab, former star of ESPN’s "Stump the Schwab" trivia show, was laid off by ESPN in 2013. The stats guru has been getting phone calls from some worried ex-colleagues since Black Wednesday in Bristol, Conn. He’s also been reaching out to old friends he worked with during his 26 years at ESPN, which is majority owned by the Walt Disney Co.

Schwab's advice is simple. Yes, there is life after ESPN. They should not blame themselves. Schwab believes he was laid off because of his salary, pure and simple. Likewise he believes almost all of the laid-off 300 were done in by their salaries, not their performance. If anything, they should blame what he called the "Every Single Penny Network" for wildly overspending on NFL and NBA TV rights in recent contract negotiations.



“One guy told me, ‘I feel like they didn’t need me anymore.’ I said, 'No, it’s not a question of that, it’s a question of dollars. It’s only about the money,'" said Schwab, who serves as a consultant for Dan Patrick's "Sports Jeopardy" show on Crackle.


“It’s about raising the Disney stock price. It's about showing investors, ‘Hey, we’re fiscally responsible, we got rid of 300 people.’ Unfortunately when you did, you hurt X number of people who have families. Who dedicated their lives to that company. Who poured everything into it, gave 110 percent. Whose lives hinged on it. I mean the blood, sweat and tears of people who worked so hard in that place and who lost their jobs … I can think of three people who, combined, had over 100 years between them."

With its dual revenue streams from affiliate fees and ad revenue, ESPN had long seemed immune to the problems impacting the rest of the sports media industry. But parent Disney ordered ESPN to trim $100 million from its 2016 budget and another $250 million in 2017, The Big Lead reported in September.

Some ex-ESPNers reacted with stunned fury to the news that well-regarded, heart-and-soul executives such as Gus Ramsey and Gerry Matalon in Bristol and Mike Thompson in Los Angeles were shown the door. Ex-SportsCenter anchor turned Dodgers announcer Charley Steiner protested the "mass executions" on his Facebook page.

“The pain, anger, frustration, sadness and outrage I feel after the mass executions (harsh, but occupationally and socially correct) of the past week of so many people I know, worked, lived and grew up with is enormously painful,” Steiner wrote Friday. “As ESPN grew from the soulful little sports cable station into the soulless monolith it has become, we were the last ones to realize what it would become.”


Within ESPN, some on-air talents such as Chris Berman, Suzy Kolber, John Buccigross and Scott Van Pelt offered on-air tributes to their pink-slipped colleagues. These classy gestures were appreciated by producers like Ramsey who needed support on the worst day of their professional lives. Ramsey tweeted:





Schwab says ESPN management has no one to blame but itself for what he called one of the most "terrible" days in the 36-year history of the company. More and more TV viewers have been "cutting the cord," or dropping expensive cable TV bundles, in favor of cheaper Web-based options such as NetFlix and Hulu. As a result, ESPN's subscriber base is shrinking. After losing about 7 million or so homes in recent years, ESPN is down to about 92 million homes.

At the same time, Schwab said ESPN management has overpaid for TV sports rights to keep them away from rivals like Fox Sports 1 and Fox Sports 2 led by aggressive ex-ESPNer Jamie Horowitz. ESPN pays a staggering $1.9 billion a year to the NFL for "Monday Night Football."

That's double what NBC pays for the higher-rated "Sunday Night Football." In its last contract with Major League Baseball, ESPN doubled its annual payout to $700 million. When its new deal with the NBA takes effect in 2016, ESPN will nearly triple its annual fee to $1.4 billion. There are probably a lot of on-air talents with expiring contracts who are "sweating bullets" right now, Schwab said.

"I'm not afraid to say it. One of the biggest reason (for the layoffs) was bad decisions on rights fees," Schwab said. "The football deal and the NBA deal. With the NBA deal, you triple what you’re paying them? Really?"

The double whammy of falling subscriber revenue and rising TV rights fees would come to a head sooner or later. When Disney cracked down, ESPN had no choice but to obey its corporate master at the Mouse House, added Schwab.

"You could see this coming. Unfortunately. The Mouse says you have to make a certain amount of profit. You're not making enough profit? You have to get rid of people. You have to trim the budget. What’s going to happen next year when they have to trim $250 million? Hah, hah. Good luck."

Social media users recognized the end of an era:





In a memo, ESPN president John Skipper promised to be "as supportive as we can" to laid-off employees through severance packages and outplacement benefits. But after the severance money runs out, then what? There's no support group for people who get shown the door in the struggling media business.

The phone stops ringing, the emails stop coming. Potential employers view you as damaged goods. Old colleagues avoid you like the plague. The other parents in Little League who once envied your high-flying sports job treat you with pity. The worst is seeing the sneaking delight in some people's eyes as they secretly enjoy your fall from the top.

When Schwab got the bad news in 2013, he was overwhelmed by the outpouring of love, support and respect. But the world moves on. It didn't last long.

"For the first few days, the phone didn’t stop, the texts, the emails. But then after a few days it stopped, all right," he said. "The bad part was there were a number of ex-ESPN people I called up to see about other things and other ideas I had. But a lot of them didn’t return my phone calls. Out of common courtesy, at least say, 'Hey, I don't have anything.' Or 'Hey, sorry, it wouldn't work out.' Or 'Hey, are you OK?' Instead it was like, 'Nope, he's not here, he's not here, he's not here.' Really? I've left four messages. Where the f— is he? But OK, fine, be like that. You find out who your friends (are) — and who your friends aren’t."

The workers hit hardest by media layoff are typically older, married employees dealing with mortgages and college tuitions. Some of the ESPNers laid off along with Schwab in 2013 are still looking for work more than two years later, he said. Now, the job market will be even more "flooded," he said, putting all the power in the hands of employers.

So what can the laid-off employees do? Sure, they can apply for jobs at Fox Sports, NBC Sports, CBS Sports or other ESPN competitors. But there are only so many jobs to go around, said Schwab. The sad truth is many of these higher-paid executives will lose out to millennials in a business where "younger and cheaper" is the hiring mantra.

“Unfortunately, there are a number people who are in the in their late 40s, early 50s and mid-50s who have put 30 years of their life into that place. Now they’re asking, 'What's next?' They don't have an answer … wouldn't be surprised if several of them retire."

The sad news is that the 300 laid-off ESPNers will have plenty of company on the unemployment lines.

The country's unemployment rate remained at 5.1 percent for September, according to the U.S. Department of Labor's Bureau of Labor Statistics, with 7.9 million unemployed. But many economists believe the real unemployment rate is much higher. Millions of Americans have dropped out of the labor force after fruitlessly looking for work for years. Others who would prefer full-time work have been forced to freelance for pennies on the dollar, with no health benefits, in what The New York Times calls the "Gig Economy."

The result? Wages are dropping. The American Middle Class is disappearing. There's growing populist anger toward big corporations such as Disney, which actually asked some laid-off American employees to train their foreign replacements. With negative headlines swirling, Disney later reversed a plan to shift 30 tech jobs to an agency known for outsourcing jobs to immigrants on temporary H-1B visas, according to the Los Angeles Times.

Disney has held its 80 percent majority stake in ESPN since 1996 when it bought Capital Cities/ABC Inc. for $19 billion. That seems like ages ago. But Schwab remembers one prescient colleague warning him three decades ago that the all-for-one, one-for-all atmosphere at ESPN would disappear once it was swallowed by the entertainment giant.

"The late, great Beano Cook told me, 'You watch how different it becomes, it will never be the same place,'" recalled Schwab."He was right. It took a while to change — but now it will never be the same. They can say whatever they want, it will never be the same."
 
ESPN clearly places more value in employing real life trolls like Stephen A. Smith, Skip Bayless, Jemele Hill, and the like.
You people day after day night after night watch the crap these guys are on with all of its ads and that is why ESPN cares more about them than the Grantland writers who you read when someone here cut/pastes the whole aeticle or you read while dropping a deuce and ignoring the ads. You get what gets paid for and the blow yards get more viewers and advertising revenue. Everyone who paid attention to ESPN is guilty. #nowgetoffmylawn
 
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Wasn't a huge fan of Grantland as a whole, but I did like Zach Lowe's stuff. Hopefully he and all the other now-unemployed writers can get back on their feet soon.

ESPN clearly places more value in employing real life trolls like Stephen A. Smith, Skip Bayless, Jemele Hill, and the like.
I get the other two but what's wrong with Jemele Hill?
 
Soulful to soulless: Former ESPN employees blame overspending, Disney for layoffs


By Michael McCarthy

@MMcCarthyREV
Published on Oct. 28, 2015
One week ago, ESPN unceremoniously laid off 300 employees, many of them well-regarded producers, programmers and editors at the peak of their talents and careers.

Now that the headlines and press releases have faded, reality is setting in. ESPN is cutting loose these often middle-aged executives. Their career prospects may be bleak in a sports media industry riven by cutbacks, ageism and shrinking cable TV audiences.


MORE: Who should have gotten laid off at ESPN? | Stephen A. Smith gets the nod

Howie Schwab, former star of ESPN’s "Stump the Schwab" trivia show, was laid off by ESPN in 2013. The stats guru has been getting phone calls from some worried ex-colleagues since Black Wednesday in Bristol, Conn. He’s also been reaching out to old friends he worked with during his 26 years at ESPN, which is majority owned by the Walt Disney Co.

Schwab's advice is simple. Yes, there is life after ESPN. They should not blame themselves. Schwab believes he was laid off because of his salary, pure and simple. Likewise he believes almost all of the laid-off 300 were done in by their salaries, not their performance. If anything, they should blame what he called the "Every Single Penny Network" for wildly overspending on NFL and NBA TV rights in recent contract negotiations.



“One guy told me, ‘I feel like they didn’t need me anymore.’ I said, 'No, it’s not a question of that, it’s a question of dollars. It’s only about the money,'" said Schwab, who serves as a consultant for Dan Patrick's "Sports Jeopardy" show on Crackle.


“It’s about raising the Disney stock price. It's about showing investors, ‘Hey, we’re fiscally responsible, we got rid of 300 people.’ Unfortunately when you did, you hurt X number of people who have families. Who dedicated their lives to that company. Who poured everything into it, gave 110 percent. Whose lives hinged on it. I mean the blood, sweat and tears of people who worked so hard in that place and who lost their jobs … I can think of three people who, combined, had over 100 years between them."

With its dual revenue streams from affiliate fees and ad revenue, ESPN had long seemed immune to the problems impacting the rest of the sports media industry. But parent Disney ordered ESPN to trim $100 million from its 2016 budget and another $250 million in 2017, The Big Lead reported in September.

Some ex-ESPNers reacted with stunned fury to the news that well-regarded, heart-and-soul executives such as Gus Ramsey and Gerry Matalon in Bristol and Mike Thompson in Los Angeles were shown the door. Ex-SportsCenter anchor turned Dodgers announcer Charley Steiner protested the "mass executions" on his Facebook page.

“The pain, anger, frustration, sadness and outrage I feel after the mass executions (harsh, but occupationally and socially correct) of the past week of so many people I know, worked, lived and grew up with is enormously painful,” Steiner wrote Friday. “As ESPN grew from the soulful little sports cable station into the soulless monolith it has become, we were the last ones to realize what it would become.”


Within ESPN, some on-air talents such as Chris Berman, Suzy Kolber, John Buccigross and Scott Van Pelt offered on-air tributes to their pink-slipped colleagues. These classy gestures were appreciated by producers like Ramsey who needed support on the worst day of their professional lives. Ramsey tweeted:





Schwab says ESPN management has no one to blame but itself for what he called one of the most "terrible" days in the 36-year history of the company. More and more TV viewers have been "cutting the cord," or dropping expensive cable TV bundles, in favor of cheaper Web-based options such as NetFlix and Hulu. As a result, ESPN's subscriber base is shrinking. After losing about 7 million or so homes in recent years, ESPN is down to about 92 million homes.

At the same time, Schwab said ESPN management has overpaid for TV sports rights to keep them away from rivals like Fox Sports 1 and Fox Sports 2 led by aggressive ex-ESPNer Jamie Horowitz. ESPN pays a staggering $1.9 billion a year to the NFL for "Monday Night Football."

That's double what NBC pays for the higher-rated "Sunday Night Football." In its last contract with Major League Baseball, ESPN doubled its annual payout to $700 million. When its new deal with the NBA takes effect in 2016, ESPN will nearly triple its annual fee to $1.4 billion. There are probably a lot of on-air talents with expiring contracts who are "sweating bullets" right now, Schwab said.

"I'm not afraid to say it. One of the biggest reason (for the layoffs) was bad decisions on rights fees," Schwab said. "The football deal and the NBA deal. With the NBA deal, you triple what you’re paying them? Really?"

The double whammy of falling subscriber revenue and rising TV rights fees would come to a head sooner or later. When Disney cracked down, ESPN had no choice but to obey its corporate master at the Mouse House, added Schwab.

"You could see this coming. Unfortunately. The Mouse says you have to make a certain amount of profit. You're not making enough profit? You have to get rid of people. You have to trim the budget. What’s going to happen next year when they have to trim $250 million? Hah, hah. Good luck."

Social media users recognized the end of an era:





In a memo, ESPN president John Skipper promised to be "as supportive as we can" to laid-off employees through severance packages and outplacement benefits. But after the severance money runs out, then what? There's no support group for people who get shown the door in the struggling media business.

The phone stops ringing, the emails stop coming. Potential employers view you as damaged goods. Old colleagues avoid you like the plague. The other parents in Little League who once envied your high-flying sports job treat you with pity. The worst is seeing the sneaking delight in some people's eyes as they secretly enjoy your fall from the top.

When Schwab got the bad news in 2013, he was overwhelmed by the outpouring of love, support and respect. But the world moves on. It didn't last long.

"For the first few days, the phone didn’t stop, the texts, the emails. But then after a few days it stopped, all right," he said. "The bad part was there were a number of ex-ESPN people I called up to see about other things and other ideas I had. But a lot of them didn’t return my phone calls. Out of common courtesy, at least say, 'Hey, I don't have anything.' Or 'Hey, sorry, it wouldn't work out.' Or 'Hey, are you OK?' Instead it was like, 'Nope, he's not here, he's not here, he's not here.' Really? I've left four messages. Where the f— is he? But OK, fine, be like that. You find out who your friends (are) — and who your friends aren’t."

The workers hit hardest by media layoff are typically older, married employees dealing with mortgages and college tuitions. Some of the ESPNers laid off along with Schwab in 2013 are still looking for work more than two years later, he said. Now, the job market will be even more "flooded," he said, putting all the power in the hands of employers.

So what can the laid-off employees do? Sure, they can apply for jobs at Fox Sports, NBC Sports, CBS Sports or other ESPN competitors. But there are only so many jobs to go around, said Schwab. The sad truth is many of these higher-paid executives will lose out to millennials in a business where "younger and cheaper" is the hiring mantra.

“Unfortunately, there are a number people who are in the in their late 40s, early 50s and mid-50s who have put 30 years of their life into that place. Now they’re asking, 'What's next?' They don't have an answer … wouldn't be surprised if several of them retire."

The sad news is that the 300 laid-off ESPNers will have plenty of company on the unemployment lines.

The country's unemployment rate remained at 5.1 percent for September, according to the U.S. Department of Labor's Bureau of Labor Statistics, with 7.9 million unemployed. But many economists believe the real unemployment rate is much higher. Millions of Americans have dropped out of the labor force after fruitlessly looking for work for years. Others who would prefer full-time work have been forced to freelance for pennies on the dollar, with no health benefits, in what The New York Times calls the "Gig Economy."

The result? Wages are dropping. The American Middle Class is disappearing. There's growing populist anger toward big corporations such as Disney, which actually asked some laid-off American employees to train their foreign replacements. With negative headlines swirling, Disney later reversed a plan to shift 30 tech jobs to an agency known for outsourcing jobs to immigrants on temporary H-1B visas, according to the Los Angeles Times.

Disney has held its 80 percent majority stake in ESPN since 1996 when it bought Capital Cities/ABC Inc. for $19 billion. That seems like ages ago. But Schwab remembers one prescient colleague warning him three decades ago that the all-for-one, one-for-all atmosphere at ESPN would disappear once it was swallowed by the entertainment giant.

"The late, great Beano Cook told me, 'You watch how different it becomes, it will never be the same place,'" recalled Schwab."He was right. It took a while to change — but now it will never be the same. They can say whatever they want, it will never be the same."

Just a point of clarification on ESPN's loss of subscribers:

I can't find the article again that I read recently, but the reason their numbers are down is less because of people cutting the cord with cable and more with the way they negotiated their deal with cable companies recently that exchanged the number of houses ESPN is in for a $6/subscriber fee. So now cable companies are offering packages that don't include ESPN (which people are signing up for), and apparently the added money their getting per subscriber is not balancing out with the subscribers they've lost.[/QUOTE]
 
Just a point of clarification on ESPN's loss of subscribers:

I can't find the article again that I read recently, but the reason their numbers are down is less because of people cutting the cord with cable and more with the way they negotiated their deal with cable companies recently that exchanged the number of houses ESPN is in for a $6/subscriber fee. So now cable companies are offering packages that don't include ESPN (which people are signing up for), and apparently the added money their getting per subscriber is not balancing out with the subscribers they've lost.
both are equally guilty as causes for the drop. really, they both point towards the same thing - espn's self importance and ignorance about the way people consume media today.

they charged a higher distribution fee to cable co's while agreeing to a lower overall penetration level so they could fit more espn networks into the most popular cable package. in other words, they increased prices and put too many eggs in one basket (cable package) assuming it would continue to dominate subscriptions. problem is, those distro fees are inevitably passed on to the consumers, who are already going to lower cable packages or abandoning cable entirely. espn seemingly didn't acknowledge that possibility and acted as if subscription levels would go unchanged. turns out numbers are indeed dropping. that might not have been so bad, but then it ties in to the massive fees they've agreed to pay for certain rights and boom.....expenses skyrocketing while sales are dropping.

espn misplayed it across the board.
 
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Anyways, look for Woj to try to hire Zach Lowe. Just a guess, but the pieces line up.
Doubt that happens. Yahoo already has quite the compliment of NBA columnists. They have Woj, Marc Spears, Michael Lee and Shams Charania, the latter two of whom were just hired on for this season.
 
Doubt that happens. Yahoo already has quite the compliment of NBA columnists. They have Woj, Marc Spears, Michael Lee and Shams Charania, the latter two of whom were just hired on for this season.

I remember there were rumors over the summer of Woj trying to build a basketball version of MMQB over at yahoo, and he specifically talked to Lowe and Jonathan Abrams. If he wants them, now is the perfect time.
 
I have always liked Grantland.com. It was Simmon's pet project, and man was it interesting and in demand.

They had really talented people, producing some really original content. Some of the writers really got to flex their pen over there, and it was interesting for us to consume. Sadly, politics took over; and people can't live with Simmons' idea succeeding.

I think Bill Simmon's concept of Grantland was proven to be an in demand, popular combination of sports and pop culture.

It's a damn shame really, It was a fantastic concept, and Bill recruited enough talent to make it take off for real.
 
TMZSPN.

What a fucking terrible organization. I never hope an organization goes out of business, because you have to consider all the people losing jobs and the consequences for them and their families.

But you have to think that having ESPN on your resume gets you another job pretty quickly, regardless of the level you're employed.

But they've done so much to taint sports, which should just be a source of entertainment for fans and nothing else.

So for that reason...I'm out.
 
What a fucking terrible organization. I never hope an organization goes out of business, because you have to consider all the people losing jobs and the consequences for them and their families.

Given the several hundreds of people ESPN has laid off in the past two years alone, I don’t think you have to worry about that, since its already happening anyway.
 
Given the several hundreds of people ESPN has laid off in the past two years alone, I don’t think you have to worry about that, since its already happening anyway.

True.

I just fucking hate ESPN and everything it's done to sports.

It's what MTV did to music. It ruined the purity of the entertainment and appealed to the lowest common denominator.
 
Not trying to justify the decision ESPN made, but Grantland was a serious financial black hole, allegedly losing millions every year it existed.

The content was great and unique compared to everything else ESPN does, but their traffic numbers simply weren't there. Plus Simmons was pretty steadfast in his refusal to have ads on the site.

On top of that they had a massively expensive office in Los Angeles and a serious travel budget.

Edit: I've heard a lot of people talk about how Simmons is just going to absorb these former Grantland folks into his own new vanity site and it's really hard to see that happening.

HBO bought Bill Simmons the sports and pop culture personality and that's it. They didn't buy Grantland. This idea that HBO (or anyone else not named ESPN) has the pockets or the desire to pay for a $10-15M dollar a year vanity site (Grantland's rumored yearly costs) that won't make money is foolish.
 
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don't forget the mlb deal either. dollar amount wasn't quite as high, but as a % increase it was similar to the nba deal and what did it get them? oh, one whole playoff game - and that wildcard one, at that? just lol. they messed up the last round of negotiations with major cable co's too.

ultimately, they bought in at the height of a bubble and agreed to massive long-term deals based on an outdated business model. sad part of it is the people suffering the consequences aren't the ones responsible for the mismanagement.

Hit the nail on the head. ESPN is effectively being subsidized by cable subscribers. They charge an average of 7 dollars per cable subscription. I read an article recently that in an a-la carte model, ESPN would have to charge 32 dollars per ESPN subscriber to reach the same revenue.

That is completely unsustainable. With the shift to online programming... it seems ESPN is trying to get a head of the colossal losses they will be seeing with those long term rights deals.

I love Disney as a stock, but hate ESPN in their portfolio. Its a sinking ship. Pigs get fed, hogs go to slaughter.
 
Hit the nail on the head. ESPN is effectively being subsidized by cable subscribers. They charge an average of 7 dollars per cable subscription. I read an article recently that in an a-la carte model, ESPN would have to charge 32 dollars per ESPN subscriber to reach the same revenue.

That is completely unsustainable. With the shift to online programming... it seems ESPN is trying to get a head of the colossal losses they will be seeing with those long term rights deals.

I love Disney as a stock, but hate ESPN in their portfolio. Its a sinking ship. Pigs get fed, hogs go to slaughter.
Can you find that article that you read somewhere?
 

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