ESPN Taking Hardline With Talent

Sports-TV powerhouse ESPN, a profit machine that has long towered over the media landscape, is showing signs of stress as the pay-TV industry goes through an unprecedented period of upheaval.

Marketwatch reports a decline in subscribers as customers trim their cable bills, coupled with rising content costs and increased competition, has ESPN in belt-tightening mode, people familiar with the situation say.

The company, majority owned by Walt Disney Co., has lost 3.2 million subscribers in a little over a year, according to Nielsen data, as people have "cut the cord" by dropping their cable-TV subscriptions or downgraded to cheaper, slimmed-down TV packages devoid of expensive sports channels like ESPN.

Viewership of SportsCenter, its marquee and high-margin sports-news show, has sagged since September, due in part to the fact that younger consumers are increasingly finding sports news at their fingertips on smartphone apps.

At the same time, the prices ESPN pays for the rights to show games are ballooning. Rivals including 21st Century Fox Inc.'s Fox Sports and Comcast Corp.'s NBC are aggressively pursuing sports properties to feed their own outlets, which is also driving up prices.

Last year, ESPN agreed as part of a renewal deal with the National Basketball Association to triple its average annual fees from $485 million to about $1.47 billion, people familiar with the deal said.

ESPN sees talent as one area where it can control its costs, and it has been taking a hard line in negotiations.

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