NEW YORK – ESPN President John Skipper was the keynote speaker Wednesday for Sports Business Journal’s Sports Media and Technology Conference, and addressed a wide variety of topics in an interview with SBJ Executive Editor Abe Madkour.
Below are excerpts of their conversation:
On the current narrative on ESPN
Madkour: The narrative around your company over the last year has been challenging, between questions of editorial judgement, staff defections, overpaying potentially for rights and even with last week’s news about some of the job cuts that were very tough on the company. How do you get through this narrative?
Skipper: The narrative is dramatically contradicted by the continuing success of ESPN. We just finished our fiscal year . . . and we finished the year for the first time in five years as the number one cable network among all key demos: Men and Persons 18-34, Men and Persons 18-49, Men and Persons 25-54. We are also the number one network in primetime among those demos.
If you look at the aggregate ratings of the cable universe, our share of those ratings improved 3-5 percent this past year. That is on top of a year in ’14 in which we were one of only two networks whose ratings were up – two in the Top 20 . . . if you add it to our dramatic increase in our digital platforms last year, [in September] we had a per-minute audience on our digital platforms of 323,000 every minute. That happens to be, by the way, a larger audience than any of the other sports cable networks on television . . .
And we are going to market with overall impressions in an advertising world that works certainly around digital impressions. There’s a recent study that suggested that ESPN.com was the most clean, well-lit place on the Internet for advertisers. So we’re making money off of those new impressions on digital platforms.
Now, occasionally I have people say to me, “Gee, that’s only because you have all these live events.” And I want to plead guilty to that. Just as Apple is enjoying all of their success because of all of their superior products, we’re enjoying a lot of our success because we have the greatest aggregation of sports rights in the history of the media . . . My predecessor, George Bodenheimer, understood earlier than anybody else that live sports rights would be the most valuable content in all of media, which they certainly are right now.
We have a narrative internally of continued dramatic success with the people who matter to us, and that’s our fans.
On how ESPN values rights
Madkour: You talked a lot about rights packaging. Give the audience a little perspective on how you decide, for example, British Open, World Cup, EPL, but also Euro. You made a big investment in college football, obviously. Where do you make the decisions about what resonates to you in terms of going for a package?
Skipper: Well, first of all we have to operate in a disciplined manner relative to our bottom line. And we do that. And I do take exception to any suggestion that we are not thoughtful about how we spend. There’s a new narrative – seems to be the operative word today – about our spending too much money for the NFL and it is woefully uninformed to compare our NFL package to the packages of the other networks.
Skipper: Because we don’t buy 17, three-hour windows. We buy thousands of studio hours, we buy the rights to do billions of video highlights, to do the Pro Bowl, to do the Draft, we do more studio hours around the Super Bowl than whoever happens to have the Super Bowl . . . and we monetize every bit of this. So if you look at a dollar spent on the NFL on ESPN versus a dollar spent on anywhere else, doesn’t matter what the total dollars is, it matters what the return is.
On structural changes at ESPN
Madkour: What led to the decision last week to make so many personnel changes? Was it because of the technology?
Skipper: We laid off employees last week and I want to be clear that it was the most difficult week of my tenure at ESPN. I talked to a lot of people who had been at ESPN a long time. They said last Wednesday, Thursday and Friday were the toughest days on the campus in Bristol, Conn.
And we do not make those decisions lightly because we understand that we are affecting people’s lives, and we regret that and we appreciate their contributions.
On the other hand, we are doing what we need to do to succeed in the world and that is to make sure we are organized in the best way to take advantage of that. If you are cutting jobs in retreat, you’re in trouble. If what you are doing is preparing to have a modern workforce with the people we need to adapt to the changing environment, then we are preparing for success. And that is what we’re doing and why that action last week is not contradictory to a narrative of success.