Your comments remind me of what happened in the music industry in the late 90s and early 2000s. Several of the big name artists (eg Mariah Carey, REM, Robbie Williams, even Prince) signed huge multi-album recording deals. I guess the sentiment was that these artists with a proven track record were a safe bet, even a sure thing.
Pretty much every one of these deals turned into a financial disaster. The biggest of these was probably Mariah Carey, who ended up being paid $28m not to sing [1].
My point is that the presence of massive deals doesn't guarantee continued growth or success.
The most ominous part of this article is the loss of 7m subscribers. ESPN has managed to shake off--so far--the overall trend that cable TV is dying. The average age of TV viewers is increasing [2], which is bad for advertising and thus bad for revenue.
In the US, the more subscribers a cable or satellite TV company has, the more bargaining power they have, which translates to lower per-subscriber content costs. This is why Comcast wanted to merge with TWC. It's all about reducing TV costs. It's also why cable companies will practically give away TV (ie your cable Internet is under $20 with a TV package or $60+ without).
So for the last 10+ years, ESPN has managed to thrive in a market where demographic trends are ultimately against them. The flood waters are still rising and eventually you run out of dry land.
> Pretty much every one of these deals turned into a financial disaster. The biggest of these was probably Mariah Carey, who ended up being paid $28m not to sing
I worked in the entertainment industry during this time.
Great point to remember specific to Mariah Carey was that she was originally signed by Tommy Mottola who she eventually married WHILE he was the head of the label (Columbia) & Music division. This 'business' decision had a very personal side. It was more than just a financial disaster.
Pretty much every one of these deals turned into a financial disaster. The biggest of these was probably Mariah Carey, who ended up being paid $28m not to sing [1].
My point is that the presence of massive deals doesn't guarantee continued growth or success.
The most ominous part of this article is the loss of 7m subscribers. ESPN has managed to shake off--so far--the overall trend that cable TV is dying. The average age of TV viewers is increasing [2], which is bad for advertising and thus bad for revenue.
In the US, the more subscribers a cable or satellite TV company has, the more bargaining power they have, which translates to lower per-subscriber content costs. This is why Comcast wanted to merge with TWC. It's all about reducing TV costs. It's also why cable companies will practically give away TV (ie your cable Internet is under $20 with a TV package or $60+ without).
So for the last 10+ years, ESPN has managed to thrive in a market where demographic trends are ultimately against them. The flood waters are still rising and eventually you run out of dry land.
[1]: http://www.nytimes.com/2002/01/24/us/record-label-pays-dearl...
[2]: https://www.washingtonpost.com/news/business/wp/2014/09/05/t...