ESPN saved $10 million by getting rid of 3 of its most recognisable names

Radio host Colin Cowherd is out at ESPN, becoming the third big name to not have his contract renewed by the network this summer.

ESPN let go of Bill Simmons in May, four months before his contract expired, and he hasn’t appeared on any ESPN platform since. The company announced it wasn’t re-upping Keith Olbermann’s deal under more amicable circumstances in early July.

These three departures come amid widespread reports that ESPN is cutting costs. According to media reporter James Andrew Miller, who wrote an oral history of ESPN, the company will save $US10 million with the moves:

We asked ESPN if this figure is accurate and will update this post when we hear back, but it seems plausible based on prior reports on these guys’ salaries.

The more interesting question is how big a role ESPN’s cost-cutting measures played in deciding to let go of Simmons, Olbermann, and Cowherd. Miller says is wasn’t about money:

Simmons apparently agrees, if you consider favoriting something on Twitter a signal of agreement:

The rise in the value of broadcasting rights for live sports (increasingly the only thing viewers consistency watch live on TV), and the increased efforts of Fox and NBC to get a piece of those rights, has forced ESPN to shell out more and more money to retain the properties they already have. It has also forced the network to pick its battles. They don’t have the World Cup, English Premier League, or Champions League anymore. Soon they won’t have motorsports. Bidding for the Olympics came and went in 2014 with NBC signing a new deal before it went to open bidding.

ESPN has consolidated its live sports offerings around its core properties: Monday Night Football, the NBA, college football, and college basketball. All of these deals run through at least 2021, which means ESPN’s dominance isn’t going away anytime soon. But when you spend $US7.3 billion on the new College Football Playoff, double the cost of your NBA deal, and increase your Monday Night Football deal by 73%, it has to affect your business. We’ve seen it with Fox and NBC picking up rights for smaller sports that previously went to ESPN. Are we now seeing it with talent?

$US10 million doesn’t exactly move the needle for ESPN. In addition, as the subtext of Miller’s tweet/Simmons’ fav suggests, there’s reason to think that these three departures each had their own specific motivations and shouldn’t be roped into a broader ESPN IS DITCHING TALENT narrative. But ESPN’s business model is changing, with the cost of broadcasting sports rising at the same time that cable subscribers fall. Every media company, even successful ones like HBO, are reassessing their priorities and ESPN is no exception.

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