ESPN has had a heck of a 40+ year run, but CNBC’S Jim Cramer is putting his Mickey Mouse ears to the street and is hearing that ESPN’s future may be doomed, according to the Disney reorganization plan.
“I think it’s really about getting rid of ESPN,” Cramer told TheStreet.com of Disney’s sports megamedia entity.
Disney announced a corporate restructuring this week. CEO Bob Chapek told CNBC, “What we want to do is accelerate our transition to a real direct-to-consumer priority company.”
ESPN has already lost 20 million subscribers over the past 10 years, according to OutKick.com. An emphasis on streaming would not prevent sports fans from bailing on cable TV for other media outlets, as sports fans’ eyes shift from the television to other media devices seamlessly.
“There is a belief we’re saturated in sports,” Cramer said on TheStreet.com. “That ESPN is no longer integral.”
“ESPN used to be this unbelievable thing, and now it’s just a really expensive thing they are having trouble monetizing. ESPN is no longer the precious place that it once was.”
Sports broadcasts have already begun to move away from traditional TV networks. OutKick.com is predicting cost cuts and layoffs for ESPN just as Disney is being hit hard by COVID-19’s effect, which kept movies out of theaters and tourists out of Disneyland.
Front Office Sports reported that ESPN is preparing to lay off hundreds of staffers in order to save of tens of millions of dollars.
Guggenheim Partners’ Michael Morris wrote in a note to investment clients that the Disney restructuring makes a stand-alone ESPN more likely, according to Deadline.
How much would you pay per month to continue watching cornhole and hot-dog eating coverage?