ESPN Once Again Finds Itself Making Headlines For All The Wrong Reasons

By Justin Muszynski, The Bristol Press

July 19, 2021

First it was with a series of layoffs that rocked the sports network headquartered in Bristol over the past few years. Last week, it was a racially-charged dispute between two high-profile employees that has gone from a behind the scenes topic to apologies being said live on the air. And, most recently, another on-air talent has come under fire for saying the marketability of a Major League Baseball star is hindered by the fact he needs the assistance of an interpreter to speak. This led to another on-air apology.

When asked for comment about the recent controversies involving the network, ESPN shared an email sent out to employees from company President Jimmy Pitaro, who, speaking on the subject of “diversity, inclusion and belonging,” acknowledged the company still has much more work to do.

The memo – sent out last Friday following the tense situation between two top on-air talents that reportedly “outraged” many employees of the sports network – addressed comments made by an ESPN host and reporter, who is white, that suggested another host and reporter, who is black, was given a prestigious assignment based on her race.

"If you need to give her more things to do because you are feeling pressure about your crappy longtime record on diversity - which, by the way, I know personally from the female side of it, like, go for it,” Rachel Nichols, who is best known for her coverage of the NBA, said last July, while unaware her video camera was on. “Just find it somewhere else. You are not going to find it from me or taking my thing away."

Nichols’ comments, which were recorded last July and recently shared with the New York Times, were in reference to another reporter, Mariah Taylor, who was chosen to do NBA Finals coverage last year over Nichols.

Though Nichols apologized on air for her remarks, the L.A. Times reported the only person known to have been disciplined in the incident was a digital video editor who reportedly admitted to showing the recording to Taylor. The Times also reported the same employee, who is black, has since left ESPN.

Nichols was pulled from doing sideline reporting during the NBA Finals after her comments were leaked, with the company saying this decision would keep the focus of coverage on basketball.

“We respect and acknowledge there are a variety of feelings about what happened and the actions we took,” Pitaro wrote in the memo. “The details of what took place last year are confidential, nuanced and complicated personnel matters.”

Stephen A. Smith apologized the next day while on the air of “First Take,” the show he is best known for co-hosting, for his comments about Angels All-Star Shohei Ohtani, who is Japanese.

When asked for comment on the Smith matter, an ESPN spokesperson Friday said the company “let his personal apology stand as the comment.”

RACE ISSUES

In his memo, Pitaro also shared some of the progress he says the company has made regarding the Black Employee and Consumer Experience, which was announced a year ago, saying “we have a much better story than what you’ve seen this week.” He also added, “we want to make sure you are aware of the critical progress we’ve made…even though we know we have much more work to do.”

Former ESPN employee Jemele Hill, who had well-documented battles during her time with the network, spoke to the L.A. Times about the Nichols-Taylor story.

“ESPN has a consistent history of undervaluing black talent,” Hill recently told the paper. “This isn’t a Rachel versus Maria story. This is a story about why they didn’t value Maria enough to allow her to take full ownership of the job. ESPN collects black faces, but it seems like that when those black faces become black voices, it’s a problem.”

The talent agency that represents Hill did not return a request for comment from The Bristol Press.

Andrew Marchand, whose sports writing responsibilities for the New York Post include coverage of ESPN, has covered the Nichols-Taylor situation closely. He recently gave an interview to The Bristol Press to discuss this incident and other topics centered on the network.

Marchand, who worked at ESPN from 2007 until 2018, when he rejoined the Post, conceded the company’s handling of the leaked Nichols comments “didn’t go well.”

“The idea that you could have this wound and just hope it kind of heals itself, I guess there’s a chance it would have worked, but it just got infected,” Marchand said. “There’s a race aspect to the story that is sometimes involved in other situations, but because of the comments that Rachel Nichols made, put that in the forefront of the story, and the implications from the New York Times story that there’s sort of divide between management and some personnel at ESPN, that’s part of it as well.”

Aside from some of the bad publicity that has come along with the backlash from recent incidents, ESPN – though still the dominant powerhouse of sports coverage – has other challenges that include a decline in paid TV subscribers and subsequent rounds of layoffs that began in 2013.

Like most big companies during the pandemic, ESPN in November announced it would be laying off about 300 people and eliminating an additional 200 open positions. This came as major sports leagues shut down to stop the spread of covid-19. In spite of the layoffs, it should be noted the Sports Business Journal last month named ESPN the best in sports media, highlighting its ability to pivot during the pandemic and navigate the shutdown of live sports around the world.

However, the round of layoffs during the pandemic was just the latest over the past eight years or so.

In August 2019, ESPN – whose main headquarters are on Middle Street in Bristol – announced it would be laying off more than 30 employees, most of whom were based in Bristol. In June 2019, the company said ESPN Deportes Radio would soon stop broadcasting, which would lead to layoffs for 10 full-time employees and 25 part-timers. Preceding this was an announcement in late 2017 of 150 layoffs, and in April 2017, the elimination of 100 positions. In 2015, ESPN laid off 300 employees, which was preceded by another round of layoffs in 2013.

“That’s impacted people greatly,” Marchand said. “It’s hard to work at a place when you’re having layoffs every couple of years because it feels like the ground is uneasy under you. And so, that can’t do anything but hurt morale.”

At its zenith, ESPN boasted a subscriber base in 2011 of 100 million. Since then, that number has declined over the years, with the most recent Nielson estimate indicating ESPN is currently in 83 million homes. This drop in subscribers to the sports network comes as many people are ditching cable as a whole in favor of streaming services.

“That’s been the lifestream of ESPN, which was a brilliant plan from the start and one that made them the most dominant sports media company in the world,” Marchand said of cable subscribers. “That’s going in the wrong direction now. It’s still very profitable. It’s still a really good business. It’s just not crazy in terms of the money as it once was, and the arrow is going the wrong direction.”

Subscription rates don’t necessarily tell the entire story, however, as ESPN just last weekend set notable viewership and usage marks, drawing in just over 60 million viewers across ESPN networks and ABC, which accounted for one in three overall TV viewers. The company also reported, between last Saturday and Monday, ESPN’s digital reach was the most since March 20 – the start of March Madness.

“This past weekend is a testament to sports being back – period,” said Flora Kelly, ESPN vice president, strategic and brand insights. “Through our top-notch and diverse portfolio of rights, ESPN is the only brand that reaches the vast and diverse group of people we call sports fans. Our ability to serve these fans across various platforms ensures we stay with them and cater to their sports needs throughout such a pivotal sports weekend.”

The two most notable strategies to continue making ESPN a massively profitable company center around long-term deals with the biggest and most watched sports leagues, as well as launching its own streaming service in 2018, known as ESPN+.

“They definitely have a plan to succeed going forward, and that’s centered around ESPN+,” Marchand said. “They’ve been very good in their history of realizing where distribution is going and being the first or one of the first to get there.”

According to an earnings report from the Walt Disney Company, which owns ESPN, subscribers to the sports company’s streaming service increased from about 6.6 million in December 2019 to about 12.1 million in January of this year. A spokesperson for the company indicated this week ESPN+ now has about 13.8 million subscribers. The company estimated ESPN+ will have somewhere between 20 and 30 million subscribers by the end of fiscal year 2024.

One of the challenges with a streaming service that centers on sports games and UFC fights is the content from the leagues is essentially leased, Marchand noted. ESPN’s answer to that has been locking up long-term contracts.

“You’re only leasing these sports, so to keep the business going, you’re going to have to keep paying these leagues for that,” Marchand said.

Currently, ESPN has deals with Major League Baseball, the NHL and the LaLiga soccer league that extend through 2028; a deal with the PGA Tour that runs through 2030; a deal with the NFL that goes through 2033; and a contract with the SEC that runs through 2034. The latest addition to these long-term deals includes exclusive coverage of the Wimbledon tennis tournament, which lasts until 2035.

“It might work out for them that, when you do these 10-year deals, that by the end of these contracts, they’ll be the strongest player in the game and it’ll kind of be a no-brainer for them,” Marchand said. “But there’s a difference between what they’re trying to do and what the other streaming outlets are doing.”

“Whether it’s an exclusive right or a simulcast right, it’s important that we go ahead and utilize our content that we have purchased the rights to in a way that we see fit, again given that distribution flexibility that we talked so much about at the onset of this conversation,” Chapek said. There are rights constraints that we have that might meter how fast or how slow we go. And then, existing deals could do that as well. Then, of course, we’ll only do it if it’s accretive to our shareholders. So when the time is right to really stomp on the gas and go even stronger into our DTC platforms for sports, we’ll do that.”

Justin Muszynski can be reached at 860-973-1809 or jmuszynski@bristolpress.com.