The agonizing wait is almost over. The Walt Disney Co.’s ESPN could order sweeping layoffs as early as next week, according to CNBC.
The long-awaited job cuts will impact both on-air talent and management at ESPN’s corporate campus in Bristol, Conn., reported CNBC’s Alex Sherman. The downsizing is expected before Disney reports earnings on May 10.
The painful round of pink slips has been expected at ESPN since returning Disney chief executive officer Bob Iger vowed to slash 7,000 jobs and cut $5.5 billion in costs.
Stephen A. Smith, one of ESPN’s highest-paid talents with an annual salary of $13 million a year, warned painful cuts were coming a month ago.
“Hell, for all I know, I might be one of them,” Smith said on his “K[no]w Mercy” podcast. “Now, I doubt that. But it’s possible. No one knows.”
As Smith sadly predicted, the situation could be coming to a head.
- Timing is everything. According to sources, the most vulnerable on-air talents are those with expiring contracts or only a year left on their deals. ESPN could buy out some deals and not renew others. “This is really going to impact people with expiring contracts,” warned one source.
- ESPN is increasingly adopting a take-it-or-leave negotiating posture, said sources. Some talents may be offered as much as a 50% pay cut, according to Andrew Marchand of the New York Post. “I do think they’re going to go to some other people who make big numbers and say, ‘Well, you can stay, but we’re going to cut you in half,’” he said on his sports media podcast. “People are going to have decisions to make on that. They might end up just leaving and getting paid their full contract.”
- In a memo to Disney employees, Iger said Disney’s job cuts would come in three waves. The first wave broke last month, impacting its metaverse strategies unit and Beijing office. A second round of cuts would come in April, wrote Iger. The third and final round would hit before summer, he added. “The difficult reality of many colleagues and friends leaving Disney is not something we take lightly,” wrote Iger.
- Unfortunately, layoffs are nothing new at ESPN as the cable giant battles the twin challenges of cord-cutting and rising sports rights fees. ESPN cut 300 jobs – and let another 200 positions go unfilled – in 2020. It shed 250 employees in two waves three years before that, including on-air talents like Trent Dilfer and Danny Kanell. And in 2015, ESPN ordered the first layoffs in its history, dropping 300 employees.
This is a difficult moment for Disney and ESPN. The cutbacks come as the Worldwide Leader in Sports prepares to defend its 21-year business relationship with the NBA.
The NBA will seek a combined $50 billion to $75 billion for its next long-term cycle of media rights.
If a cost-cutting Disney and ESPN can’t afford it, the league’s former media partner, NBC Sports, and parent Comcast Corp. are waiting in the wings.
There’s a decades-long rivalry between Disney and Comcast and their respective CEO’s Iger and Brian Roberts.
In 2004, Roberts led a $54 billion takeover attempt of Disney. Since then, the Dueling CEOs have tangled repeatedly. Iger has won most of their corporate battles. If Roberts can snatch the NBA, he could win the war.
ESPN declined to comment.
