From a young age, I knew I was never going to be an athlete. So what does one do when they can’t play? They watch. And I did. Being a member of the chain crew for middle school football, I spent my less-than-flattering years handling stats for boys’ basketball in high school.

After graduating college with a Media Studies degree, I was beat reporting for a local minor hockey league, on-air sports trivia for a local morning sports show, and call screening. After realizing the uphill battle I was facing, I landed behind the scenes, spending most of my years in affiliate sales.

Being successful in this business is not easy. That’s an understatement. The amount of work it takes to be a reporter, a journalist, producer, etc. – you’re always trying to prove yourself. Fighting to just keep the job you have now, and still continue to try and move up. And the way that we consume our news today has only made it tougher.

Journalism has changed, to be painfully obvious. How many self-proclaimed “beat reporters” do you follow on Twitter? Content consumption has changed drastically because the demand has become so high for attention. There are going to be consequences – most of all, major layoffs like the ones we saw at ESPN this week. There are a few factors to blame.

Content Delivery
Let’s start with the way we get our content. We want it now; on our phones, on our computers, on the plane. Content creators/networks/studios have been able to do that for us, giving us everything on-demand.

What seems to have been lost along the way is the idea that the content that is so easily accessible should have a price tag that reflects that. Staying up to catch highlights on SportsCenter to see Russell Westbrook put up another triple-double? Not needed anymore. I’ll just log onto Twitter, unmute one of those Twitter trolls and get the clip, for free.

Production Costs
Entertainment content costs money to make. To produce. To film. To write. It’s an art form that we get lost in; get passionate about, feel like we are a part of it. Love does cost a thing — quite a few “things,” actually — to give you the warm fuzzies. Especially sports, where we have as fans a major investment in.

Feelings aside, the production costs alone are astronomical. $20,000-plus for one local professional sports broadcast, which doesn’t even include talent. How and why has it come to this?

CLEVELAND, OH – OCTOBER 30: LeBron James #23 of the Cleveland Cavaliers smiles after a play in the second quarter against the New York Knicks at Quicken Loans Arena on October 30, 2014 in Cleveland, Ohio. NOTE TO USER: User expressly acknowledges and agrees that, by downloading and or using this photograph, User is consenting to the terms and conditions of the Getty Images License Agreement. (Photo by Jason Miller/Getty Images)

Rights Fees
Beside the production economics are the rights fees. Early in 2016, ESPN and TNT retained the rights to carry NBA games through the 2024-2025 season. Reports say the deal’s value was at $2.66 billion per year, 2.8 times higher than the previous NBA deal. Biting off more than you can chew tends to make you choke. The idea that they can make it up off of subscriber fees is no longer a dependable business model. So, the fat has to be cut somewhere.

Speaking of subscriber fees…
Ranging from pennies to upward of $12 per subscriber for a regional sports network, sports/entertainment/name-your-topic networks set that price depending not only on what they paid for the rights of that content, but how much it will cost to maintain. It’s also determined by the television provider they are negotiating with, how many homes they serve and what other owned networks the affiliate carries.

Ratings
A big part of maintaining is channel placement and of course ratings. All content creators want to be in front of as many eyeballs as possible. More viewers equals more money. And each has requirements on where they want to be placed on your lineup. This is all negotiated between your television provider and the network providing the content.

OAKLAND, CA – MAY 10: Stephen Curry of the Golden State Warriors poses with the Maurice Podoloff Trophy after Curry was awarded the 2015-16 Kia Most Valuable Player Award on May 10, 2016 at Oracle Arena in Oakland, California. (Photo by Noah Graham/NBAE via Getty Images)

Talent
Oh, and then there’s the entertainers – the athletes, the talent. They also need to get paid, and LeBron James and Steph Curry are among the most desired. LeBron opted out last year because of the new NBA television deal that was being negotiated to make more money (and “rest” apparently).

Once those deals are closed and rights are set, that’s when the money starts to trickle down from the networks paying the leagues/teams for those rights, to the television providers paying the networks, to you as a consumer paying your provider. When you stop paying, the subscriber loss starts, and so does the money flow.

What’s happening now is the pricing of the rights fees are only growing, consumers are ditching cable, and more television providers are either merging or going out of business. Networks and television providers assumed there was no ceiling when it comes to the amount to pay for this content. There was, and the layoffs are proof.

This is bad news for anyone trying to make a living in the sports entertainment business. Certain jobs like beat reporters, writers are no longer a necessity. Not only can you do more with less people, but quality is no longer top of mind either.

FOX regional sports networks laid off hundreds of freelancers not too long ago. Why? The RSNs aren’t modeled anymore to be a breaking news outlet. They are invested only in the teams they are partnered with, producing live games, and shelf-life stories. It’s efficient, cost-effective, and they serve their purpose. Hence, there’s no need for any extras.

I fear this is only the tip of the iceberg of what’s to come in the next decade. The cable bundle model has major flaws. It is now a thing of the past, and it makes more than enough sense that people should only pay for what they want. But if that happens, the quality starts to suffer. The cable model needs to be restructured, but so does the monopoly of rights fees, who owns the content, and the pricing.

Professional athletes will also have to take a hit too. And you, the consumer? You have to pay for what you want to watch! Besides other major life reasons, stop using your parents’ cable log in and get your own account. That is, after all, the only way this industry is going to stick around. And you do like sports, right?

About Holly Wetzel

Holly has spent the majority of her career in affiliate distribution negotiating contracts with content providers across the US. She covers the media landscape of rights fees, retransmission consent, carriage disputes, and the regional sports network business.
She's a Cleveland native and graduate of The University of Mount Union and constantly wishes she was still a student. Since that's never happening, she compensates for it over wine, cooking, sports, not working out, and any Turner Classic movie. Holly can be followed on twitter @HollyanneLiz

  • e51

    Everyone was too short sighted in this whole process. You can’t expect the NBA and its player’s association to take less now. The players are about to get paid big, and I don’t expect it to change much. Everyone can see the brick wall, but they will all still crash into it.(ignore it)

  • This isn’t exactly a BAD thing. This is what ESPN has actually needed to do for a long time. Sure, people are out of jobs, and that’s unfortunate, but for the network to continue to succeed, it has to rework itself into something sustainable. It’s not like radio’s consolidation where you had Cheap Channel and Cume-U-Less getting rid of necessary jobs in favor of cutting costs, this is ESPN getting rid of jobs that are no longer necessary or viable. They’re still going to invest in talent to produce worthwhile, profitable content (watch them hire Katie Nolan away from Fox Sports in the not-too-distant future). But they’re not going to have dedicated beat reporters for each team anymore, they’re going to cut back on the redundancies, and they’re going to shift their focus to content that is geared toward the changes that are obviously coming in delivery methods — i.e. a la carte, on demand and open to those who don’t subscribe to cable. This is responsible management, not the sign of a dying company.

  • Dan Pfeifer

    On the one hand, there is probably some slimming down that’s been needed. This is brutal honesty: For a “big-name layoff,” I didn’t know a lot of the folks listed, and when I saw a lot of them were local writers or team reporters, I thought to myself, “Did ESPN really need to have someone covering those beats? How important was a Memphis Grizzlies writer to ESPN.com?”

    I will say this: I’m starting to wonder just who is, or will be, left to cover these teams and leagues independently. The money is going into rights and production. Non-rights holding outlets aren’t seeing the need to cover teams or leagues for which they don’t have rights. Newspapers are dying a slow death. Local TV reporters? Local radio guys? Here’s the thing: When the leagues or teams do something wrong, someone — someone — has to think critically and hold their feet to the fire, right? Be there to ask the tough questions? Something?

    Oddly enough, I’m wondering if the next source of journalism — sending reporters to cover games — might come from a strange source: Fantasy sports sites like Rotowire and maybe even the DFS sites. They rely heavily on those regular reports from beat writers to provide player information. I wonder if they might end up employing their own cadre of reporters, even if only on a small-wages basis, just to ensure that info is still there.