The months-long economic shutdown caused by the coronavirus pandemic is sparking painful fallout for media companies.
ESPN could lay off hundreds of employees in the coming weeks, sources told Front Office Sports.
One source pegged the potential number of job losses between 300 and 700 employees. Another estimated 400 possible lost jobs.
The cuts are expected to hit hardest among ESPN employees who work behind the camera. But some on-camera TV and radio talents could be impacted — particularly if their contracts are expiring this year.
The network may also ask its highest-earning talent and executives to take a reduction in salary. The goal is to potentially cut tens of millions in salary, said sources.
On the talent side, ESPN has been letting high-salaried stars with expiring contracts walk away. On Oct. 6, Keith Olbermann announced ESPN was letting him out of his deal early to launch a political show on YouTube.
ESPN is also trying to tighten its belt before upcoming rights negotiations with the NFL, NHL and eventually, the NBA over the next few years, said a source. “They’re going after a bigger NFL portfolio. They’re going after the NHL. They need stuff for ESPN+. That all takes money.”
Currently, ESPN has around 4,000 employees at its headquarters campus in Bristol, Conn., and 6,500 worldwide. ESPN declined to comment for this story.
“They are looking at a lot of different things. They’re looking closely at their entire operation,” said a source.
Another source said the pressure for cost savings is coming directly from ESPN parent Walt Disney Co., which was forced to shut down its lucrative theme parks and cruise lines for months during the pandemic. “This is coming from Burbank,” they said, referring to the location of Disney’s headquarters.
While Disney World in Florida has reopened, the original Disneyland in Southern California remains closed and will likely not reopen for months. Disney recently announced it would slash 28,000 theme park jobs or roughly 25% of its theme park workforce.
“As heartbreaking as it is to take this action, this is the only feasible option we have in light of the prolonged impact of COVID-19 on our business,” Josh D’Amaro, chairman of Disney Parks, said in a statement.
If the cuts do come down, it would mark ESPN’s third major round of layoffs in five years.
Back in 2015, ESPN let go 350 employees, mostly behind-the-scenes staffers.
Two years later, it dropped over 100 well-known TV and radio talents, including Trent Dilfer, Jay Crawford, and Britt McHenry.
Ryan Glasspiegel of Outkick first reported that ESPN was “bracing for major cost cuts in 2020” that could result in the potential layoff of hundreds of employees.
ESPN is not alone in slashing jobs to reduce costs, as Fox Sports, Sports Illustrated, the Pac-12 Networks, and other media companies have ordered layoffs in recent months to make up for lost revenue during the pandemic.