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State of the Screens

Is ESPN on the Trading Block?

By October 21, 2021November 11th, 2021No Comments

Big question #1: Would Disney be willing to spin ESPN off into a separate company?

Quick answer: Possibly, but Disney denies a recent report from Puck.

Quote from unnamed Disney source:

“There are now conversations happening regularly at Disney about whether or not to spin off ESPN.”

Flashback: Is ESPN+ A Winner For Disney?

Why this matters: ESPN is the crown jewel of all cable networks with 2021 projected revenue of $10.3B.

Big question #2: How does ESPN make money?

Source of 2021 revenue for ESPN (% of total) according to Kagan:
1) Subscriber fees – $7.9B (77%)
2) Advertising – $2.4B (23%)
3) Total – $10.3B

Big question #3: How many people subscribe to ESPN?

Quick answer: 82M

ESPN subscribers through traditional pay-TV (YoY growth):
1) 2010 – 100M
2) 2011 – 99M (↓ 1%)
3) 2012 – 98M (↓ 1%)
4) 2013 – 99M (↑ 1%)
5) 2014 – 95M (↓ 4%)
6) 2015 – 92M (↓ 3%)
7) 2016 – 90M (↓ 2%)
8) 2017 – 87M (↓ 3%)
9) 2018 – 86M (↓ 1%)
10) 2019 – 85M (↓ 1%)
11) 2020 – 82M (↓ 4%)

Big question #4: What about ESPN+?

Quick answer: A direct-to-consumer (DTC) offering is the future for ESPN.  The challenge is replacing ≈ $658M (82M * $8.03) in monthly revenue from pay-TV fees when ESPN+ generates ≈ $66M (15M * $4.47).

 

Michael Beach

Michael Beach

Michael Beach is the Chief Executive Officer of Cross Screen Media, a media analytics and software company that enables marketers to plan, activate, and measure CTV and linear TV at the local level. Michael is also the founder and editor of State of the Screens, a weekly newsletter focused on video advertising that is a must-read for thought leaders in the advertising industry. He has appeared in such publications as PBS Frontline, The Wall Street Journal, The New York Times, Axios, CNBC and Bloomberg, and on NPR’s Planet Money podcast.