Threads like this can get way off over time. My last post on it:
It started with
@Mofo saying:
I think that network is just a sinking ship and it's shedding salary in a <probably doomed> attempt to stave off bankruptcy.
I responded:
They aren't even close to bankruptcy. Where did you come up with that idea? They have $4 billion in revenues and as part of Disney, they are reported to be profitable. They are obviously in (1) a business that is undergoing a massive change in the way it interfaces with its customer, and (2) have to deal with Disney and all that entails.
Let's break that down:
1. The idea that letting 20 highly paid employees is an attempt to "stave off bankruptcy" is ridiculous. They might have saved $100 million at most. They just signed an $85 million contract with one talent - McAfee. There are tons of reasons that they let these people go, but staving off bankruptcy is not on the list.
We really don't need to go further ... this is obvious on its face, and any additional posts about it were all about goalpost moving.
2. I pointed out the $4 billion in revenue because it is rare for $4 billion companies to suddenly go bankrupt. Equally ridiculous that shedding $100 million for a company with $4 billion in revenues to be read that way. I own and run a multi-million dollar business. The idea that I don't understand the difference between revenue and profit is absurd. I distinguised revenue and profit in my original post on the subject and did so in several follow-up posts.
3. I clearly stated here in my first post, and many times thereafter, "
as part of Disney, they are reported to be profitable." I don't work for ESPN. I am not an accountant for ESPN. I don't do corporate analysis about ESPN. But, I can google, and I read a couple of articles that indicated that ESPN was profitable. If you don't agree, I don't care. If you want to do the research that shows me they aren't, go for it. While you are there, find me a single article about ESPN "staving off bankruptcy" because, at the end of the day, that's what this discussion was about.
In 2022 they were split out into its own division - they split Disney into Parks, Entertainment, and ESPN. That will get more visibility into exactly how ESPN performs. In an investor call, their CEO said:
ESPN is a differentiator for this company," CEO Bob Iger said.
"It's the best sports brand in television. It's one of the best sports brands in sports. It continues to create real value for us. It is going through some, obviously, challenging times because of what's happened in linear programming."
"But the brand of ESPN is very healthy, and the programming of ESPN is very healthy. We just have to figure out how to monetize it in a disrupting and a continuing -- or disrupting world. That's it. But we're not engaged in any conversations right now or considering a spin-off of ESPN." Link below.
Does that sound like a company that is about to go bankrupt?
As Iger points out, and I did in my original post, they are obviously going through a major shift in their business - linear to streaming. There are going to be ups and downs, there will be good decisions and bad. People will be let go (like they just did) and they will hire new talent (hiring McAfee to be more attractive to young viewers). None of those things on their own indicate bankruptcy.
