ESPN axes 300 people across its business, and is not filling 200 currently open positions. While few of the cuts will immediately affect on-air personnel, the New York Post reports that the company has been letting some of those contracts expire over the past few months. The layoffs follow an organizational change made last month by Disney (ESPN’s owner) that will result in the company focusing more of its attention on direct-to-consumer and streaming initiatives. "The speed at which change is occurring requires great urgency, and we must now deliver on serving sports fans in a myriad of new ways,” said chairman of ESPN and sports content Jimmy Pitaro in a memo to employee. “Placing resources in support of our direct-to-consumer business strategy, digital, and, of course, continued innovative television experiences, is more critical than ever."
Sinclair Broadcast Group took a $3.2 billion hit in the third quarter, as it wrote off a portion of the value of the Fox Regional Sports Networks it acquired for $10.6 billion last year. Hulu and YouTube both recently stopped carrying those networks on their services. The company also reported a higher rate of subscription losses during the quarter. Following the announcement, shares of the company fell 7.9 percent to $18.10 each. However, Sinclair says that, excluding the writeoffs, it would have earned $161 million. The company says its revenues were up 37 percent compared to Q3 2019, driven mostly by the newly acquired sports networks and a solid jump in political advertising during the election season.
Gannett saw its number of digital subscribers hit 1.03 million in the third quarter, an increase of 31 percent from Q3 2019. The company ended the second quarter with 927,000 digital subscribers. Despite that jump, decreases in both print and digital advertising revenue contributed to a $31.3 million net loss in Q3, up 69 percent from the same period last year. Digital advertising and marketing services revenue declined by 13.5 percent, while print ad revenues plunged 30.9 percent. While Gannett has said that many of the cost cuts it made earlier this year to offset losses were temporary, the company is now rolling out permanent cuts, including a round of voluntary buyouts. According to USA Today (a Gannett paper) increasing paid digital subscriptions is seen by the company as a primary path toward achieving revenue growth.