• Loading stock data...
Thursday, February 22, 2024
Register Now for Future of Sports: Cybersecurity

Disney Orders ESPN Execs To Take 20%-30% Cuts in Base Salary

  • ESPN vice presidents, senior vice presidents, and executive vice presidents won’t recover lost pay, sources said.
  • However, Disney/ESPN could make up the difference in lost base salary with bonuses, stock options.
Photo credit: ESPN Media Zone
ESPN Disney Salary Cutbacks Coronavirus
Photo credit: ESPN Media Zone

The fallout from the coronavirus pandemic is about to hit ESPN executives in their bank accounts.

With parent Walt Disney Co. ordering a reduction in executive pay, ESPN executives will see their base salaries slashed by 20% to 30% starting April 5. When and if the cutback ends, these executives will not receive back pay, sources said. Instead, they will revert to their previous salary level.

FOS REPORT: 54.5% of industry executives believe that it would be at least 60 days before leagues resume play.

ESPN executives received the news on March 30 when new Disney CEO Bob Chapek announced the pay cuts via an internal memo to employees.

According to Chapek’s memo, vice presidents will lose 20% of their pay while senior vice presidents face 25% cuts. Executive vice presidents and above will see their salaries reduced by 30%. 

Both Disney and ESPN declined to comment. 

Companies, leagues, and teams across the sports industry have been forced to either lay off employees or cut salaries as a result of the business impact of the coronavirus pandemic.

Given ESPN’s outsized influence in the sports media world, industry sources said they expect other media companies to follow its lead.

“This is the first domino of many for the media world,” predicted one source. “I expect others to do the same.”

It’s not clear how long these salary reductions will last. Even if the public health situation is brought under control, Disney won’t lift the salary cutbacks until its business rebounds.

“This temporary action will remain in effect until we foresee a substantive recovery in our business,” wrote Chapek in his memo.

Disney’s ABC/ESPN faces the prospect of no NBA Playoffs this year, as well as losses of games and events from a wide-ranging portfolio of sports rights including MLB, MLS, Wimbledon, and UFC, among others.

The cutbacks are likely to impact all of ESPN top management, including President Jimmy Pitaro, Executive Vice Presidents Connor Schell, Burke Magnus, Norby Williamson, and Stephanie Druley; and Senior Vice Presidents Rob King, Laura Gentile, and Ilan Ben-Hanan. 

Once the reductions are lifted, employees will return to their previous salaries. But executives will not be “made whole” for their lost wages, said sources.  

Disney’s drive to find cost savings makes sense strategically, said media advisor T.K. Gore. The entertainment giant’s television, theme park, and movie businesses have been hit hard by the pandemic. 

With Disney executive chairman Bob Iger giving up 100% of his salary and Chapek reducing his by 50%, company leaders are trying to show all employees they lead by example. 

“It’s really good for optics,” Gore said. “They send a strong message to the employee base about the culture there – and building trust.”

However, noted Gore, these cuts only impact base salaries. The bulk of compensation for some top executives come via bonuses, stock options, and other compensation tools. 

Iger, for example, made only $3 million in base salary in 2019, according to Disney’s SEC filing. But his total compensation amounted to $47.5 million, thanks to $30 million in stock options and another $21.8 million in non-equity incentive plan compensation. 

“They’re cutting the base part of someone’s salary. But it’s not their full comp package,” Gore said. “There’s end-of-year bonuses, stock, other things. It’s admirable and the right thing to do. If I worked at Disney, it would certainly send me a message. But you also need to take a closer look at what they’re really cutting. It’s really just a percentage of their base salary. There are other things that are not being cut.” 

READ MORE: ESPN’s Embrace Of User-Generated Content Is Here To Stay

The pandemic is having a “devastating” effect on the global and U.S. economies, Chapek told Disney employees in his memo.

“It’s hitting businesses like ours particularly hard. In a matter of weeks, we’ve experienced widespread disruption across our company, with our domestic parks and hotels closed indefinitely, our cruise line suspended, our film and TV production halted, and theatrical distribution delayed both domestically and internationally, and our retail stores shut down,” he wrote.

“While I am confident we will get through this challenging period together and emerge even stronger, we must take necessary steps to manage the short- and long-term financial impact on our company.”

Linkedin
Whatsapp
Copy Link
Link Copied
Link Copied

What to Read

Nick Saban

Coaches Aren’t Happy With College Football—Some Are Getting Out While They Can

NIL and the transfer portal have many college football coaches getting new jobs.
FuboTV signage

FuboTV Lawsuit Against Sports Streaming Giants Likely Faces Uphill Climb

Legal and regulatory drama heightens around the high-profile streaming alliance.
Athletes Unlimited

Athletes Unlimited Is Getting All Four of Its Women’s Pro Leagues on ESPN Platforms

The league is reducing its ESPN+ games to make room for other partners.
podcast thumbnail mobile
Front Office Sports Today

The Company That’s Selling Inspiration

0:00
0:00

Featured Today

Sabrina-Steph Wasn’t the ‘Battle of the Sexes’—But It Was Part of the Bigger War

The competition could play a factor in increasing the WNBA’s media value.
NASCAR Cup Series driver Bubba Wallace (23), in a Star Wars rebel alliance X-wing fighter pilot-inspired race suit, motions to the crowd to get louder during the driver introductions for the Cup Series Championship race at Phoenix Raceway in Avondale on Nov. 5, 2023.
February 17, 2024

Celebrity Owners, International Ambitions, and $7B Media Deals: Welcome to the New NASCAR

NASCAR boldly keeps pace with the increasingly competitive sports and entertainment world.
February 16, 2024

Wilson Introduced an Airless Basketball for $2,500. We Had Questions

The black, 3D-printed ball appeared in last year’s Slam Dunk Contest.
Emily Henegar, a baker and content creator, made a batch of NFL-inspired cookies featuring Taylor Swift and Travis Kelce.
February 11, 2024

The ‘Life-Changing’ Economy of Taylor Swift’s NFL Outfits

Appearing in Swift’s game-day wardrobe has been “life-changing” for small businesses.

Careers

Powered By

Careers in Sports

Looking for a new job? Check out these featured listings and search for openings all over the world.
Finance Manager
FanDuel
New York, NY
Senior Technical Artist - Sports Technology
EA Sports
Orlando, FL
Assistant Manager, Affiliate Operations
Adidas
Portland, OR
Chad Powers

Tuned In: Hulu Turning Glen Powell Into Eli Manning With ‘Chad Powers’ Comedy

The ‘Top Gun: Maverick’ star will play the comedic QB Manning created for ESPN+.
Inter Miami forward Lionel Messi following the victory against Los Angeles FC at BMO Stadium.
February 21, 2024

Lionel Messi Phenomenon Spurs Specialized Media Attention

Messi joins Taylor Swift and Beyoncé for celebrities to have their beat writer at ‘USA Today.’
A Bundesliga camera operator during a match
February 22, 2024

Fan Power in European Soccer Grows As German Football Deal Scuttled 

Weeks of increasingly strident protests lead to end of proposed private equity deal.
Sponsored

Live Sports Are Now High-Tech Experiences

Oracle is leading the technology revolution happening in stadiums across the world.
Oakland-A's
February 20, 2024

A’s Continue to Make History With Their Broadcast Team While Vegas Future Is Uncertain

NBC California hires Harry Caray’s grandson to join the broadcast team.
Bleacher Report
February 20, 2024

TNT Sports Getting More Serious About Golf With Inaugural Grass League Tournament

TNT Sports is finding new ways to highlight golf with PGA Tour rights locked up through 2030.
NBA All Star
February 20, 2024

NBA All-Star Game Ratings Improve As Game Does the Opposite

The game saw a 14% increase after a poor showing in 2023.
February 19, 2024

Mr. Universal: Comcast CEO on Olympics, NFL Streaming, NBA Rights

NBCUniversal parent also eyes resurgence in fan interest in the Olympics.