In September, Disney laid off 28,000 employees, mostly at its two American theme parks. It announced a loss of $4.72 billion in the most recent quarter, covering April through June. Earnings in the company’s cable networks division, which is made up mostly of ESPN but also includes properties like the Disney Channel, were down 10 percent.
Before the layoffs, ESPN had taken steps to reduce employee expenses. Some employees had been furloughed, and executives and highly-paid employees were asked to take pay cuts in recent months.
While ESPN’s highest profile employees won’t be directly affected by these cuts, some on-air talent very likely will not have their contracts renewed when they expire, and others might see less lucrative contract extensions.
According to a number of talent agents who insisted on anonymity so as not to harm their relationship with ESPN, the company is playing hardball in negotiations. In recent months, some on-air employees have signed extensions with a base salary of less than $50,000 and bonuses for each on-air appearance, when previously they had larger contracts that guaranteed a certain number of on-air appearances.
During the pandemic, ESPN has broadcast more games remotely, with a limited number of personnel on-site and most functions done from one of the company’s broadcasting hubs in Bristol, Conn.; Los Angeles; New York; or Charlotte, N.C. This saves travel and employee costs, and at least some of the increased remote production is expected to continue even after ESPN believes it is safe to fully travel again.
As the company cuts costs, it is looking toward possibly increasing its already outsized rights fee commitment. The N.F.L.’s contracts with television networks expire in 2021 and 2022, and ESPN is widely expected not only to bid to retain its “Monday Night Football” package, but also to bid on a package of Sunday games and to enter the Super Bowl rotation. ESPN’s broadcast contract with Major League Baseball expires soon, and it could look to bid on rights to N.H.L. games next year.
ESPN is just the latest sports media property to undergo layoffs. Fox Sports laid off 50 to 100 employees over the summer, NBC Sports laid off around 75 employees at its regional sports networks and The Athletic laid off 46 people.
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