Clay Travis Lobster

Writing something in defense of ESPN (which is increasingly seen as having a liberal political slant) while calling out Clay Travis (who has a bit of a fanatical following) is probably going to result in a fun week on social media for me. But fuck it — here it goes.

Yesterday, ESPN PR head Chris LaPlaca, tweeted the following out regarding Clay Travis’s most recent post once again walking his readers through the looming demise of ESPN.

Travis responded with this doozie, which plays nicely to his Twitter tribe but is frankly just an idiotic response. I mean what billion dollar entity opens up their books to squash a Twitter beef started by a personality/employee of one of their competitors?

What’s this about?

If you’re scratching your head as to what they’re arguing about and what the reality is, we’ll help you out.

ESPN will soon be laying off employees in an effort to cut expenses as they face declining subscriber numbers due to cord cutting. That’s not up for debate, nor is the fact that cord cutting will be a huge challenge for ESPN, as well as countless other cable networks. ESPN has long been one of the most widely distributed cable networks, which has made them billions and billions over the years. However, for the past handful of years, the number of households that carry ESPN has gone down. That means the loads of money cable/satellite companies pays them has been slowing (although the rate ESPN gets paid has been climbing and will continue to climb so it hasn’t been as a dramatic of a fall off as you’d think).

ESPN peaked around 100 million households and has been bleeding subscribers for a few years to the point where they are under 90 million households (although this is debatable). But what makes ESPN’s situation a bit more dire is the amount of money they have spent and will spend on contracts with the various leagues and conferences with whom they have rights deals. The basic “ESPN is fucked” case is that in a handful of years or more, the number of households ESPN will be in at may end up being below the amount needed to make the money owed to the leagues and conferences. Yikes! 

This has been covered ad nauseam and is why so many people are staring at and studying the numbers to see exactly how dicey this could get for ESPN and how soon. Enter Fox’s Clay Travis, who is like a modern day Paul Revere yelling and screaming “The cord cutters are coming! The cord cutters are coming!” While not untrue, Travis shouldn’t be taken seriously with his repeated version and narrative of the facts. From his most recent article (one in a O.J. 30 for 30-like series on the demise of ESPN):

“The cuts will come via buyouts and expiring contracts that won’t be renewed and when those layoffs start becoming apparent many will recognize that what Outkick has been writing for a couple of years now — ESPN is in a world of trouble and doesn’t know how to stem a rapidly collapsing business model.

That business collapse at ESPN has caused a panic at the network, a desperate grab for relevance that has led to a pronounced leftward move. ESPN’s trying desperately to stay relevant as ratings collapse and subscribers flee. The decision? “We’ll be MSESPN, the home for far left wing politics and sports!” Only, it’s not working.

Holy hyperbole! So what’s our beef? A few things actually and they’re not that trivial.

His math only looks at carriage revenue from ESPN and not any of the other ESPN channels or ABC

Travis bases his argument on how much ESPN gets per cable household vs. what they spend. That works, but only if you have the right numbers. From his most recent repeat of the same article:

“At the same time that ESPN has been hemorrhaging subscribers, the network has also been paying incredible sums of money for live sports rights. In fact, ESPN will pay out $7.3 billion for sports rights in 2017, that’s more than any company in America will pay for media content.

Let’s be generous and say that ESPN’s average per month subscriber price will be $7.50 in 2017. That’s higher than it will be, but let’s say that’s the cost that every single cable and satellite subscriber will be paying for ESPN in 2017.”

There is a GLARING problem here. Travis is ONLY factoring in the carriage costs of ESPN, but then using the 7.3 billion dollar figure which covers rights acquisition fees for all sports rights acquired by ESPN and its sister networks. That 7.3 billon number includes all the NBA games on ABC, as well as the glut of games spanning college, MLB, and other sports which air on ESPN2, ESPNU, The Longhorn Network, and the SEC Network. Travis is only counting ESPN’s main source of revenue while ignoring the carriage or retransmission revenue from those other networks.

ESPN2 is not that far off from a $1 monthly fee and is in over 85 million homes. If you do the math on that channel alone, it’s about a billion dollars a year in revenue that Travis just conveniently doesn’t factor in. ABC’s retransmission cost is also on the rise, although that’s a much more nominal chunk of revenue which helps pay local affiliates as well content costs for non-sports programming. However, this is still a revenue stream that essentially grew from zero not too long ago to likely over 2 billion dollars by 2020, per SNL Kagan.

Then you also have the likes of ESPNU, the SEC Network, and The Longhorn Network. We’ll even ignore the fact that Travis largely sidesteps the fact that a lot of ESPN’s deal with carriers calls for annual increases often in the neighborhood of over five percent. When you factor in all of the revenue here, Travis’s math is off by well over a billion dollars a year and maybe closer to two billion. Not exactly a rounding error!

Not counting new OTT skinny bundle households

This one isn’t on solely on Travis. A handful of new “skinny bundle” OTT providers have popped up like Sling, Vue, Hulu, DirecTV Now, and YouTube allowing those wanting a cheaper monthly cable bill to cut the cord with the likes of Comcast, DirecTV, etc. and downgrade into something cheaper. Nielsen doesn’t count these households yet (they have begun to layer them in their most recent number but they are still largely unaccounted for), but there are likely somewhere between 1.5 million to 3 million of these customers out there who are also paying for ESPN, but are not captured in the data Nielsen and by extension others are presenting. That said…

UBS believes by 2020, 15 million homes will be using these services instead of traditional cable or satellite. Travis projects out that ESPN will lose 14 million subscribers between now and 2020. UBS says they’ll basically gain that same number through these packages. Who the fuck knows what’s going to happen with these numbers, but the reality is that a big chunk of these traditional subscribers are going to still be paying for ESPN, just via one of these newer services.

Travis briefly mentions this, but then dismisses it from altering his math as he says most sports fans will just unsubscribe from these new services during months when the sports they watch are not on. I mean, how many people can and will do that, though? In theory, this only applies to certain months of the year for a sliver within a sliver of subscribers, yet that’s enough for Travis to just entirely dismiss that revenue. If the UBS numbers projections are anywhere near accurate, this is another 1-2 billion dollars of revenue he’s conveniently overlooking. I hope to god Travis doesn’t do his own taxes for his business.

Travis is a personality at a ESPN competitor facing the same financial pressures

This is just common sense in regards to conflict of interest. Travis’s been banging on the drum that ESPN is withering away for quite a while. Half his shtick at this point is being a SEC homer, railing against PC culture, and celebrating the impending doom of ESPN. It makes for damn good Periscope content, I’m told.

When people bring up Travis’s affiliation with Fox and the fact Fox and FS1 are facing the same pressures, he claps back that only about 25 percent of his income comes from Fox. That seems high, given all the big winner betting tips he provides. Kidding aside, Travis is a Fox guy no matter how much he tries to pretend that’s not the case. Pitching the demise of ESPN while working at an upstart challenger facing the same macro issues is something you can’t ignore, regardless of how much he wants you to. In fact FS1 lost more households than ESPN this past month.

While Fox/FS1 doesn’t have the same live rights commitments as ESPN, nor the massive subscriber revenue, Travis is doing a disservice to his audience by skirting the wider industry implications as well as his obvious conflict of interest.

The sketchy appended political narrative

Where Travis has really hit pay-dirt is attaching the theory that the ESPN empire is crumbling because of its left-leaning politics. From another one of his articles on this topic:

“MSESPN’s agenda is transparent to anyone with a pulse, the creation of a left wing sports network.  

It’s all a calculated move, but it’s not a decision made out of strength, it’s made out of weakness, the equivalent of a dead cat bouncing when it falls off a roof. The desperate final rantings of a dying business. 

Like Blackberry, only without the Canadians. 

ESPN realizes its business is broken and it’s desperately floundering for a successful strategy. Only that strategy, becoming a left wing network, is actually hastening its own demise. ESPN becoming MSESPN isn’t a strategy that will save the network, it’s just a method of choosing its own execution — death by extreme left wing liberalism.”

So let’s be real here. ESPN has been leaning to the left. It certainly hasn’t gone unnoticed and this perception is not good for the network. A sizable chunk of ESPN’s audience is rooting for its demise because of this. Perhaps they are even watching less ESPN or even boycotting ESPN.

Now that said, most will tell you that reports of people cutting the cord because of ESPN’s political leanings is laughable. Sure, maybe some marginal amount of people are doing this, but I mean, come on.

Most households have multiple people in them, so ESPN occasionally having some political stance is going to nix all the programming for your entire household? No more cartoons for the kids or HGTV for your DIY-loving spouse? Even if you were REALLY politically engaged and right-leaning, you’d be doing away with Fox News and whatever other programming you’d watch, instead of Caitlyn Jenner receiving an ESPY.

The funny thing is that Travis didn’t initially sell this “politics is killing ESPN” narrative when he first started doing this. But after each post on this topic got a lot of play on Breitbart and other right wing news sites, he figured why not play to that thirsty audience. His now monthly post prominently goes on the politics detour when it’s not too busy using fuzzy math.

This hasn’t gone unnoticed by industry observers.

The 70/30 tweet relates to ESPN’s subscriber revenue vs. ad revenue. Essentially, SportsTVRatings is saying that for the non-ad revenue, Travis is 100 percent wrong.

Travis at this point is just recycling the same exact post every month with updated numbers and crap math, knowing it will get eaten up and pushed all over the right wing web and Twitter. It’s smart, but it’s intellectually dishonest.

Reality for ESPN

And while I’m sure I’ll take loads of shit for shilling for ESPN here, the reality is that the network is heading for turbulent waters due to cord cutting. It also has some bad long-term deals on the books that I’m sure they’re not feeling great about right now. ESPN also is going to have to figure out how it can quell the surge of visceral dislike the network faces because of its perceived political leanings. These are all real problems and issues, which will play out over the next decade and we and others will certainly cover all of this.

That said, stuff like “Come 2021, that expense won’t be tenable for ESPN unless Disney is prepared to lose billions on the network” couldn’t be further from the truth. ESPN isn’t going away and isn’t going under. It’s probably a good bet it will still be wildly profitable come 2021, just not at the insane level of profitable it has been for so long.

The real intrigue is what happens when all these rights deals go up for bid again. Will ESPN overextend itself and put itself in real jeopardy? Will other networks jump at the opportunity to buy relevance if ESPN is more financially prudent? Will sports rights fees hit a ceiling or perhaps even go down in value because of cord cutting? Will sports begin migrating off of cable and onto network television where they can help grow retransmission fees? Or will the OTT skinny bundles sustain ESPN’s advantage and allow them to carry on as is? Will networks and leagues just opt to control their own rights and sell them at higher prices a la carte?

All of those things are to be determined, complicated to project, and will likely play out more towards 2030 and 2040, as opposed to Clay’s prophecy of a cash-bleeding ESPN in four years. It certainly makes for a good headline and a heavy dose of confirmation bias for now though, if that’s your cup of tea. But if you’re not in the mood for alternative facts, you can do much much better than Travis.

Update: Travis has some constructive thoughts on our article.

About Ben Koo

Copying and pasting my Twitter bio. I'm also refusing (for now) to write this in the third person. This is me - EIC and CEO at @comeback_sports and @AwfulAnnouncing, world's greatest chinese jew, proud Buckeye, funny dude, and sports and digital media zealot.

  • souvien

    Alt-Right Jim Rome strains sooooooo hard to crap all over ESPN…hope he’s saving tho’…his primary employer is iHeartMedia which is circling a colossal bankruptcy filing. Paying for national hot-take blowhards that produce “no measurable ratings” in major markets like NY and LA is not a winning strategy for a firm in debt up to it’s transmitters…

    • Harry Peratestes

      Rome is the absolute worst. Couldn’t draw any ratings in LA when he was put back on in his hometown market. Station ended up going Korean Language.

    • Mark Creighton Sr.

      Alt Right…you all never give up..hahahaha

  • YouAreWrongAndDumb

    This is all well and good but can be summarized in three words, fuck Clay Travis.

  • Jamie B.

    A really great breakdown of an issue more complex than it seems on its face – but holy crap does this article need a thorough copy-edit.

  • lifelong890

    I didn’t read this giant wall of text that you call an article. I only stopped here to post this: Why do you keep writing about stupid Clay Travis?

    • President Propecia

      what site do you think this is?

  • oceanvista .

    Clay Travis has become insufferable lately. Makes some salient points at times, but I can’t take the self-absorbed egocentrism. That schtick is wearing really thin. About 25% of his show (probably a conservative number) is spent telling listeners how great he is, how his show’s ratings are killing it, how you don’t want to debate someone as skilled as he, how he could be a big TV star if given the chance.

    Boring!

    It’s like listening to Charlie Sheen with a few more IQ points. And we’ve all seen how the ‘tiger blood’ rants have helped HIS career….

    • Adam Young

      I think the worst part is that you can clearly see he doesn’t believe half of the shit he says. He’s the Joel Osteen of sports bloviators.

    • smarc

      He used to be really good until he got popular with the right wing white supremacists…then he just started pandering to them harder than ESPN does to liberals.

  • Dave

    Yes the cord cutters are a big threat to ESPN, but their adolescent programming pushed sports fans like me away a long time ago. I can’t tell you the last time I watched a Studio show on ESPN, 10-15 years? Yes PTI was revolutionary in 2001 because it was something different, but then they decided to make EVERY show like that. They hired every loudmouth like Steven A Smith, Skip Bayless, etc, and their shows consisted of 2 people screaming at each other for 30 minutes. Sportscenter cut back on highlights and added editorials every 5 minutes. Then shows like Baseball Tonight and their NFL Pregame show are a shell of themselves when they hire stooges like Keyshawn Johnson and Ray Lewis. Heck, they even ruined MNF as Jon Gruden is terrible as every player on the field is a stud superstar. I actually go out of my way to avoid ESPN when I am channel surfing. And I’m a person who grew up with them in the 80’s/90’s when it was the first thing I turned on when I got home from school or woke up late on the weekends.

  • Real Talk

    ESPN is becoming a civil rights sports network.. Good luck with that because I stopped watching 2 years ago

    • C smiley

      (((They))) just do not get it. The gravy train is over.

      • Real Talk

        I can’t watch

    • Adam Young

      So you watch no sports on any of ESPN’s networks, or family of networks? I find that impossible to believe.

      • Real Talk

        Hulu plus

        • Adam Young

          Does ESPN not get any revenue from those subscriptions? I’m in the same boat as I use Sling.

          • Real Talk

            I tried sling and got rid of it because I found a bootleg website where I can watch live sports in real time to go with my Hulu subscription which I pay 7 dollars… I can give you the website but not through here

          • Adam Young

            Oh really? I’ve just ordered a Fire Stick that i might try to jailbreak. But I have a hulu sub currently so that website would be awesome to have. I’ll get in touch with you on FB.

          • Real Talk

            The website also has espn 2, sky sports and all major European / some US sport channels

          • Adam Young

            Ooooohhh, Sky Sports would be TittyCity.

          • Adam Young

            Actually I can’t because your Disqus profile is private. My email is adamjarrettyoung@gmail.com

  • C smiley

    So your argument is : “but I mean, come on.”

    “Most households have multiple people in them…” and if they have a father he will play outside with his children instead of cucking out to athletes who care nothing about him.

    • Adam Young

      “Cucking out” I see you are a Clay Travis disciple

  • Drivingtheview

    4 years from now predictions reminds how politicians somehow make talking heads seem more intelligent:

    “Scientists predict that the arctic will be ice-free in the summer of 2013”
    -Famous 2009 quote from John Kerry in his beautifully written Huffpo op-ed.

    Don’t deny ‘settled science!’ Of course, ESPN will soon report how climate change causes cord-cutting

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  • Mark Creighton Sr.

    Sorry you’re wrong. People tune in for sports, not to listen to commentators paint every story with their ideological biases. MANY people I know have abandoned the network SOLELY because of their penchant for political lecturing and social agenda stories that have NOTHING to do with SPORTS. GET IT? SPORTS.

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  • handsomeblackbrady1953

    Hey,Real Talk,some Civil Rights history:Bloody Sunday,Mar.7,1965,was when about 600 civil and voting rights activists were police-dogged,water-cannoned and beaten by Dallas County,Ala.,Sheriff Jimbo Clark’s greasy,fat,goober “deputies” on the Edmund Pettis Bridge in Selma,Ala.,while attempting to march from Selma to Montgomery,Ala.I was 11 then,my grandmother was from Tuscaloosa,Ala.,and I thought,”What a disgusting sight,peaceful protestors being attacked by redneck scum.”
    I don’t know about ESPN or its predicament,but Clay Travis,in my dearly departed father’s words,is as full of s**t as a Christmas turkey,which is why he’s on FSR,where the average IQ is about 65.

  • ffnogoodnik

    When discussing the revenue you could have also included the amount of ad money ESPN gets. I am sure it is significant.

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