ESPN continues to lose subscribers at an alarming rate.
Remember last summer when Kevin Durant and a whole bunch of other NBA players became free agents? NBA star players got big contracts, even reserves are doing well, but are those days limited? After all, can cable TV networks continue to be spending billions of dollars for sports TV rights? After all, people are cutting the cord and leaving cable, satellite and phone TV and using other video providers.
Durant and the other players will cost owners about three quarters of a billion dollars and that’s been funded in a big part by cable TV money from Disney’s ESPN and Time Warner’s Turner Sports.
Durant and the others good fortune comes from a new cable TV deal that pays the NBA about $2.6 billion a year between now and 2025. It is an enormous figure that Disney and Time Warner think will work out well for them financially. But there may be a huge problem going ahead.Last summer Disney acknowledged that about six million ESPN subscribers of all ages have cut the cable cord and simple math will tell you losing six million people even at an estimated cost of $6 a subscriber, ESPN has $430 million less annually. There are now estimates that ESPN may have lost as many as 11 million subscribers in the past five years. Meanwhile Time Warner’s TNT has lost about seven percent of its subscribers since 2011. TNT’s cost is about $1.25 a month. Both companies know they have to develop new revenue sources. Rates will rise. Disney has not been able to replace millions of fomrer subscribers with new technologies as of yet and AT and T is bidding to take over Time Warner. Life is going to change. The NBA will get the money but if cord cutting continues, will Disney and Time Warner regret the $24 billion deal?
Charles Barkley may be facing a pay cut in the future if the cord cutting trand continues.