Discuss the below:
Background:
• Founded by Bill and Scott Rasmussen in 1979
• By 1983, it was cable's largest network, reaching 28.5 million households. o In 1984, ABC bought 15 percent stake in the company, and then acquired control of the full rights six months later.
• After college football broadcasting rights were deregulated in 1984, ESPN started broadcasting Thursday and Saturday night games. These helped with their image and audience numbers obviously.
• In the late 1980s, ESPN landed major contracts with the NHL, NFL, and MLB. o Additionally, they were expanding internationally into Asia, Latin America and Europe.
• Disney purchased ESPN in 1995. Disney added several channels to the ESPN portfolio (ESPN 2, Classic, etc) o Additionally, ESPN launches ESPN magazine
• Didn't see much competition until 1998 when Fox Sports gave them significant competition for advertising dollars
Strategic Issues:
• Skyrocketing costs of broadcasting live sports o As costs rise to broadcast America's most popular sports the revenues generated have declined
• Significant cost cutting initiatives - hundreds of employees laid off / fired
• Profits are down due to a decline in subscription and viewership revenues
• Rapidly shifting TV landscape o Millenials consume media in a variety of forms o Growing competition in the space (Netflix, Hulu, online streaming)