Colin Cowherd says he expects ESPN to continue to cut costs. (Jerry Lai/USA TODAY Sports)
Colin Cowherd says he isn’t surprised about the massive layoffs at ESPN. In fact, he predicts they will continue for the next several years.
In an interview Wednesday on CBS Radio in Cleveland, the former ESPN yapper said the WorldWide Leader is forking over too much money for rights agreements. The network is now paying $3.3 billion annually to broadcast the NFL and NBA.
“This is not going to end today. They have really cost-prohibitive contracts, combined with cord-cutting,” Cowherd said. “I said this [last year] when they cut 350 people, I said it the next day, it’s awful, and it will happen annually for the next decade.”
ESPN signed a whopping nine-year contract with the NBA worth $1.4 billion annually that kicked in at the start of this season. The network inked a $15 billion rights deal with the NFL, despite an increasingly lackluster Monday night schedule. In addition to “Monday Night Football,” ESPN receives access to game highlights and broadcasts one postseason contest per season.
Given the prevalence of cord-cutting, the strategy of overextending for TV contracts doesn’t appear to be a sustainable business model.
“At Fox, we pay $1.1 billion for the NFL,” Cowherd said. “You have the 1:oo window and the 4:00 window, wild card games, NFC Championship, and two of the next four Super Bowls. We make a lot of money on the NFL … ESPN pays $1.9 billion, gets a bunch of highlights, no Super Bowls, and one increasingly irrelevant Monday Night Football game. We have a great NFL contract, they have a really marginalized NFL contract.”
Cowherd is one of several big name ESPN personalities who’s left Bristol in recent years. The longtime talk radio host signed with Fox Sports in 2015 for a contract that pays him more than $6 million annually. Bill Simmons, Keith Olbermann and Skip Bayless are also no longer with ESPN. The WorldWide Leader was reportedly prepared to offer Bayless a deal worth roughly $4 million per year, but Fox Sports topped them.
Since ESPN is hemorrhaging subscribers –– its lost at least 12 million households over the last five years –– it will likely keep looking to cut costs. The WorldWide Leader can seemingly no longer afford to pay exorbitant rights fees and keep its newsroom intact.