To Protect Its Empire, ESPN Stays on Offense

ESPN likes to call itself the Worldwide Leader in Sports, and by most every measure it is in a league of its own.

The network produced 35,000 hours of programming in 2012, including at least half of all live athletic events televised in the United States. It is a prodigious cash machine, regularly generating nearly half of the operating profit of Disney, its parent company. Wielding its wealth, it buys the rights to nearly all it desires: $15.2 billion for “Monday Night Football,” $5.6 billion for Major League Baseball and $7.3 billion for a 12-year deal to broadcast the new college football playoff system, to name just a few. From its sprawling 123-acre campus in Bristol (CT), ESPN operates seven national channels, an industry-leading Web site, a magazine and international sites like ESPNcricinfo.com, for cricket fans.

So it may be hard to imagine that the sports media conglomerate has arrived at one of the most precarious moments in its nearly 34-year life. The more than $6 billion in cable fees flowing annually to ESPN from almost 100 million homes is threatened as growing numbers of consumers cut ties with cable providers to avoid rising bills for pay TV, turning instead to video streaming services. In Washington, a renewed push to undo the bundling of channels into cable packages and allow viewers to simply pay for those they want has even drawn the support of Sen Richard Blumenthal (D-CT), who represents ESPN’s home state. ESPN’s viewership numbers plunged earlier this year, and that was before the debut this month of Fox Sports 1, a 24-hour network funded lavishly by Rupert Murdoch’s 21st Century Fox. Fox Sports 1 is likely to shape up as ESPN’s most formidable head-to-head rival. All of this, particularly consumers’ move away from pay TV, is reverberating in Bristol.