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ESPN Has Lost More Than $2B Cutting Cost; Is the Cable Giant in Trouble?

ESPN is cutting talent, they’re cutting cost and they’re reporting bleeding money in some areas because of the dramatic change in cable television subscriptions.

According to Business Insider, “ESPN has lost about seven million subscribers in the last two years, down from approximately 99 million homes with the network in 2013 to about 92 million homes this year.”

You combine that with the recent layoffs by the network, multiplied by the inflated cost of how much the Worldwide Leader in Sports is paying to broadcast live sports shows, results in about $2 billion in lost revenue.

As a result, despite the decreasing number of homes carrying ESPN, the percentage of those homes that depend on ESPN is actually increasing. This is seen by the continuing rise in how much ESPN charges cable companies per subscriber, also known as subscriber fees or sub fees.

In 2011, at their peak in terms of subscribers, ESPN was charging cable providers an estimated $4.69 per subscriber, per month. In other words, everybody who had a cable subscription plan was paying about $68 per year for ESPN alone, whether they watched it or not.

Since then, the number of homes with ESPN has dropped ~8.3%. However, the amount ESPN is able to charge for each of those customers is actually up 40.9%, to an estimated $6.61 per subscriber, per month, according to the Wall Street Journal.

The bottom line is that ESPN is actually making more money than ever off cable subscription fees, despite the drop-off in subscribers.

The days of ESPN being your only source for live sporting events and highlights are long gone, with several online media establishments have just as much, if not more influence.

-- Glenn Erby

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