More ESPN Radio Changes Aren’t a Problem If You Prioritize Local Programming (2023)

As the days and months began to pass, those within media circles began to realize that the Pac-12 would not attain a new media rights contract. The Power Five conference’s existing 12-year deal with FOX and ESPN expires in 2024, but the schools had trouble coming to a resolution on the best path to pursue. Last summer, UCLA and USC announced that they would move to the Big Ten beginning in 2024, months after it secured a record-breaking media rights deal for seven years and worth more than $8 billion. While the future was beginning to look bleak, securing a new deal was never ruled out entirely.

The peripatetic nature of the college football landscape over the last year has further consolidated the sport, with the Pac-12 now only having four teams remaining. ESPN was involved in discussions to retain those media rights, but nothing came to fruition. Burke Magnus, the new president of content at the network, began his career in sports media largely ingrained in college sports and is disappointed in the outcome.

“We were kind of always hopeful that we could figure something out and continue to be in the Pac-12 business,” Magnus said. “We never really got close, and I think that was more of a factor of their expectations than not matching up with our analysis, and frankly others’ analysis.”

ESPN’s college sports portfolio is in a state of transition after severing its relationship with the Big Ten and agreeing to an exclusive 10-year media rights contract with the Southeastern Conference (SEC) that begins next year. The network had an ability to reach a deal with the Big Ten but ultimately decided to proceed without the property, ending a decades-long partnership. Magnus does not directly deal with rights negotiations, as that is now the responsibility of executive vice president Rosalyn Durant; however, he still contributes to the conversation and provides his input.

“The rights business is kind of an interesting one to operate in and you have to really kind of be somewhat dispassionate about things from an emotional level because things come and go,” Magnus said. “….It’s really something where we’re looking at the overall portfolio across all sports with financial discipline and with research and data informing what’s going to move our business and help grow our business and move it forward.”

Earlier this month, Oregon and Washington joined the Southern California schools in announcing a move to the Big Ten. The next day, Arizona, Arizona State and Utah announced they would join the Big 12, which took a contrasting approach to its media rights negotiations. The conference, led by Commissioner Brett Yormark, opted to begin negotiations with existing partners FOX Sports and ESPN last fall, well before the expiration of the ongoing contract in 2025.

“I think the Big 12 did, in many ways, what [the Pac-12] should have done – recognizing an opportunity to be more in tune with the marketplace and valuation for their product,” Magnus said, “and they were able to be opportunistic with their current partners – FOX and ESPN.”

Having proprietary rights with the SEC, Atlantic Coast Conference (ACC) and most of the Big 12’s schedule – not to mention most other Division I conferences; more than 40 Bowl games and the CFP National Championship Game, ESPN is still the predominant home of college sports. It remains a priority of the network going forward, remaining firmly embedded within its content portfolio.

Rooted in Bristol

ESPN is headquartered in Bristol, Conn., outside of a sprawling metropolis where most media companies choose to open their offices. Yet the “Worldwide Leader” is arguably at the center of today’s turbulent media ecosystem where changes are made that have implications on posterity and enable the ability to innovate.

As a result, The Walt Disney Company’s Chief Executive Officer, Bob Iger, announced a strategic reorganization of the company into three core business segments – entertainment; parks, experiences and products; and ESPN itself. External reports and other obloquy suggested that the company was interested in divesting the sports network, but that has since been refuted when Iger recently emphasized its importance to the Disney brand.

ESPN is in the midst of conversations with other companies in a quest to find a strategic partner to purchase a minority stake in the company, much of which is being handled by Iger and ESPN Chairman Jimmy Pitaro. Additionally, ESPN will report its own earnings for the first time this fall, providing insight into the metrics of the sports media content powerhouse.

“People will get a look into the ESPN business like they’ve never had before, at least from a financial perspective,” Magnus said. “I think they’ll understand through those reports just how complicated our business is, but at the same time, just how dynamic and how healthy in many ways our business is.”

Throughout the two fiscal quarters within the calendar year, the trend of cord cutting continued its upward trajectory. According to data from Nielsen Media Research, ESPN has 71.2 million cable subscribers, but this July marked the first time FOX Sports 1 surpassed its scale of linear distribution. The network reportedly charges multichannel video distributors $9.42 to carry its networks, and has had to grapple with the loss of nearly 30 million subscribers in the last 12 years.

During Disney’s quarterly earnings call, Iger expressed how the company is reviewing options for the future of its linear networks, most notably ABC. The over-the-air channel is the home of marquee sporting events such as the NBA Finals and CFP National Championship Game and is slated to broadcast Super Bowl LX in 2026. If the company decides to move on from the network, it has the potential to complicate matters pertaining to ongoing media rights deals. Magnus shared that ABC plays “a critical part” in the network’s distribution strategy, but also conveyed that a future with a direct-to-consumer (DTC) product feels inevitable.

ESPN is in the process of developing its own DTC offering under the codename “Project Flagship,” but does not yet have an official plan for its launch. Iger and Pitaro, on numerous occasions, have articulated the inexorable nature of the shift, currently in the exploratory phase. The goal of such a platform would be to give sports fans the ability to purchase ESPN as a standalone product and access all of its studio programming, live game broadcasts and additional content.

“It is an enormous decision that has to be thoroughly vetted and thoroughly modeled,” Magnus said. “That’s what we’re in the process of doing, which is not to suggest it’s not going to happen. It’s just a question of when, which we don’t know; and it’s a question of how, and we don’t know.”

Even so, the network has no plans of abandoning its linear channels and still see the outlets as a feasible value proposition. Instead, ESPN uses the phrase “parallel paths” to describe the multitude of ways consumers can access the product.

“We want to be everywhere a sports fan could possibly consume relevant, premium content,” Magnus said, “and the linear business will continue to be very, very viable for a relatively long term.”

Layoffs Alter the Playing Field

With just weeks to go until kickoff, Senior Vice President of Production Lee Fitting departed the company, complicating matters heading into a new 11-year media rights contract with the National Football League. Fitting was responsible for overseeing both Monday Night Football and College GameDay, properties emerging from intervals of transition. Magnus affirmed that Fitting made invaluable contributions to ESPN in his 25 years with the network and that everyone is “full speed ahead” for the start of football season – the busiest time of year.

“The impact immediately is making sure that nothing falls through the cracks in his absence, which we’ve already put into place,” Magnus said. “Long term, it’s an opportunity for a new leader or leaders to emerge to handle what are two incredibly important sports categories for us.”

The 2023 regular season marks the second year Joe Buck and Troy Aikman will occupy the lead Monday Night Football broadcast booth, joining ESPN after 20 years at FOX Sports. Scott Van Pelt, Ryan Clark and Marcus Spears were added to the Monday Night Countdown team after frequent revisions over the last several years. The alteration of the studio team, however, was necessitated after the network laid off various members of its on-air talent pool – including host Suzy Kolber and analyst Steve Young.

FOX Sports has inked multiple recently-retired athletes, including Derek Jeter, Rob Gronkowski and Tom Brady, with little to no broadcasting experience to lucrative contracts over the last several years. ESPN has not operated in as pronounced of a manner as FOX Sports, but is continuing the ManningCast with Peyton and Eli Manning for select Monday Night Football games on ESPN2.

“I think we’re always willing to explore that kind of approach – again, within reason,” Magnus expressed. “First of all, the person has to be good on air. Just because they were an iconic athlete doesn’t mean they’re going to be a successful broadcaster…. We don’t rule anybody in and we don’t rule anybody out. I think you’ll see us dabble in that environment if it’s a good fit, if it’s going to help us grow and if the results are good.”

Ultimately, decisions surrounding the layoffs were based on the fiscal standing of the company and ensuring that it can best allocate its funds. While the network is excited to introduce its new lead NBA broadcast crew of Mike Breen, Doris Burke and Doc Rivers, the move was predicated by the end of Jeff Van Gundy and Mark Jackson serving as analysts for these marquee games. The vicissitude was not performance-based, according to Magnus, instead occurring after an analysis of the scope of NBA coverage and how it could be most prudently optimized.

“Even though it’s difficult, we take great pains in, first of all, evaluating people on an individual basis and then communicating to people on an individual basis,” Magnus said, who has been through several rounds of layoffs over the years at ESPN. “I don’t know [that] there’s any other way to do it that sort of demonstrates in a better way how much we care and how difficult it is.”

The timing of the move comes just two seasons before the NBA’s media rights expire, and the Association is said to be looking for a confluence of linear and digital partners in the next deal. ESPN considers the NBA an important property to retain and has been actively planning for these significant negotiations. The burgeoning popularity of the sport both domestically and abroad with a young demographic is enviable for advertisers and an enterprise with whom Magnus hopes to stay in business.

“I think the NBA league office is really forward-thinking and innovative, and it kind of fits perfectly with our worldview,” he said. “I would say it’s really important for us – we’re very focused on it – but at the same time, we have to balance that excitement and enthusiasm with some financial discipline ultimately if needed.”

Betting on the Brand

While it remains unknown how it plays into its total profitability, the company is set to receive an infusion of cash flow with the upcoming launch of ESPN BET. Disney had been averse to operating in the gambling space, but the sentiment had changed in recent years and led the company to engage in exhaustive efforts to find the right partner. In the end, PENN Entertainment impressed the network and inked a 10-year, $2 billion deal to unveil an ESPN-branded sportsbook set to launch in November.

“We’ve done exhaustive due diligence on this decision over many, many years,” Magnus said. “We talked to, at one point or another, every player in that segment [and have] been comfortable given the right set of circumstances for a long time now in terms of getting into it.”

The adjusted EBITDA potential of the deal with a retail cross-sell upside and garnering performance markers, incentivized through stock warrants, lands at nearly $1.5 billion. Although the network would prefer to have it launched in time for football season, there are no worries.

“We definitely do not feel like we’re late to the game here given the power of our brand and given the numbers and the performance of our audience over time, particularly in the digital space,” Magnus said. “For us, it was really about trying to get the best possible circumstance we could get before we jumped in, and we think we have it here.”

The ESPN BET effort aligns with the introduction of a new daytime programming lineup featuring a deep roster of talented hosts, analysts and producers bringing sports fans coverage in many different ways. Mornings begin with Mike Greenberg’s program, Get Up, and are followed by Stephen A. Smith and Molly Qerim on First Take. Whether it is Christopher “Mad Dog” Russo, Mina Kimes or the newly acquired Shannon Sharpe, the show drives the sports conversation and creates a litany of memorable moments.

The central question surrounds the addition of The Pat McAfee Show, starting on Sept. 7 across ESPN platforms. McAfee is bringing his show to the network on linear and digital outlets while also continuing to appear on College GameDay and alternate broadcasts. McAfee’s contract was finalized in the midst of network-wide layoffs mandated by The Walt Disney Company, creating a situation of negative optics.

ESPN is geared towards serving the sports fan anytime and anywhere, and the company believes moving McAfee into the early afternoon slot is the best path forward. In fact, it reportedly may consider adding his show on terrestrial radio down the road, as it recently revealed a new lineup following significant audio staff cuts.

“Conversations progressed and matured over some time, and he made it known that he was willing to take [the show] inside of a media company,” Magnus said. “We pursued [it] with great enthusiasm because we think Pat and his team have built an incredible show and have really tapped into particularly a younger, but not exclusively younger, audience of today’s sports fans in a very interesting and unique way.”

Aside from refraining from using profanity, McAfee’s show will go unchanged on ESPN, including the guests, cast and ‘ThunderDome’ studio. After all, the network is licensing his show for 235 episodes a year, something Magnus argues is “quite an efficient use of money and resources.”

“Pat’s a very smart, very savvy content creator and we’re not going to meddle,” he added. “….Jimmy [Pitaro] feels the same way that I do, and part of setting off on the right foot, in my opinion, is the fact that he feels comfortable with us because we want him to be himself.”

This is SportsCenter

SportsCenter is still the marquee program and the No. 1 sub-brand within ESPN. While there has been speculation over the years about the future of the show, which has become more focused on accentuating personalities and blending information with entertainment, the ratings continue to proliferate and it still interests consumers. Magnus insisted that the entity is “not going anywhere,” remaining part of the network’s offerings for the foreseeable future.

“If it continued to try and be just a highlight show despite how powerful that was back in the day, it would have been more confined to the linear environment; it probably would have had its brand erode over time,” Magnus said. “It’s done, in my opinion, the exact opposite [by] diversifying and innovating, and I will be focused on making that continue.”

The network’s signature program brings viewers highlights across the world of sports, including the properties within its rights portfolio. ESPN will be the exclusive home of the National Hockey League’s Stanley Cup Final for the second time this upcoming season, something Magnus wishes they had every year but is still content with the deal nonetheless. Moreover, the network’s relationship with Major League Baseball remains strong 33 years later, with games more conducive for broadcast thanks to hastened pace of play. There is, however, one property or potential thereof that confounds the industry as to how it could play out down the road – Magnus and ESPN included.

The merger between World Wrestling Entertainment (WWE) and the Ultimate Fighting Championship (UFC) is scheduled to close next month, creating intrigue around how it will affect media rights negotiations. WWE’s deals with Comcast and FOX Sports expire next year and UFC’s pact with ESPN expires in 2025. The new publicly traded company, which will be known as TKO Group Holdings, will help shape the future of the sports entertainment promotion.

“I don’t think we know yet exactly how it will manifest itself in those conversations,” Magnus said of the merger. “It might be the next cycle for the WWE and not the current one, but certainly we’ve had a really positive experience with the UFC…. I don’t think we would ever rule out anything that is as significant as the WWE with sports fans.”

As another year swiftly moves towards the finish line, Magnus is confident that ESPN is and will continue to be well positioned for its future. Geared towards growing and maintaining the network while technology firms mull over exercising their financial might, he is one of the company’s veterans navigating through an incessant media environment. Myriad possibilities exist to expand reach, earn revenue and ensure relevancy – all while remaining committed to its notorious mission statement.

“I think without hesitation, we’re in a great position,” Magnus expressed. “As Jimmy [Pitaro] likes to say, ‘We like our hand here’ in terms of navigating through a changing industry. We’re very optimistic.”


Top Articles
Latest Posts
Article information

Author: Zonia Mosciski DO

Last Updated: 26/09/2023

Views: 6126

Rating: 4 / 5 (51 voted)

Reviews: 90% of readers found this page helpful

Author information

Name: Zonia Mosciski DO

Birthday: 1996-05-16

Address: Suite 228 919 Deana Ford, Lake Meridithberg, NE 60017-4257

Phone: +2613987384138

Job: Chief Retail Officer

Hobby: Tai chi, Dowsing, Poi, Letterboxing, Watching movies, Video gaming, Singing

Introduction: My name is Zonia Mosciski DO, I am a enchanting, joyous, lovely, successful, hilarious, tender, outstanding person who loves writing and wants to share my knowledge and understanding with you.