Was a Loss of $462,000,000 the Reason Behind the Firing of Stephen A. Smith?s Millionaire NBA Colleagues?

The flurry of layoffs has now hit the sporting world. Media giants like ESPN have parted ways with some of its long-term faces. And the exit of Jeff Van Gundy, who served as an announcer since 2007, is the latest one that has sent shockwaves to the fanbase. To their surprise, morning radio show host Max Kellerman and Jalen Rose weren’t spared either. Amid an attempt to ax 20 on-air talents in their third round of layoffs this year, Gundy, 61, will terminate his?Disney-owned sports network career just short of 100 Finals games.?

The former head coach was joined by play-by-play announcer Mike Breen and Mark Jackson who together became the network?s top broadcasting crew for the next 16 NBA finals. Kellerman also established himself as a must-see analyst because of some bizarre takes over the years. Fans won’t get to see these faces on ESPN anymore, though.

Monetary losses cause the spree

Former Indiana Pacers Guard Jalen Rose?s contract was around $3 million a year. Kellerman earned $1 million every year; whereas former New York Knicks head coach Van Gundy had a similar salary too. The layoffs of Rose, Van Gundy, and Kellerman started from the need to balance the revenue. Disney?s CEO Bob Iger aims to recover $5.5 billion and has also engaged in firing NFL commentators and analysts.

Apart from them, the company is going to cut many staff members to balance their finances. Stephen A. Smith, the veteran analyst, who’s making over $3 million, is pretty close with the network, which might save the New York Knicks diehard fan. The Walt Disney Network started purchasing the cable operations of ESPN in 2016 and eventually became an 80% owner.

The era of cable TV seems to be fading and Disney?s cable networks have taken huge losses. This can be indicated by them losing 7% of their revenue. Their linear networks such as ESPN boasted a revenue of $7,062,000,000 but it dropped to $6.6 billion. This loss of $462,00,000 has been somehow balanced by increased pricing and subscription to ESPN+, which is a subscriber-based premium streaming service.

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Another reason for these firings is getting linked to the increased cost of NBA media payouts and inflated TV production costs. In regard to these high-profile layoffs, the network told the Los Angeles Times, ?This is an extremely challenging process, involving individuals who have had a tremendous impact on our company. These difficult decisions, based more on overall efficiency than merit, will help us meet our financial targets and ensure future growth.”

Is the network going to go fully digital soon?

Disney CEO Bob Iger has plans to either cut or not fill 7,000 jobs at the company. The firing of twenty on-air personalities (at the time of writing) is a long-term plan. Reportedly, the current contracts of the fired employees will be paid in full. However, a lot of them are in the last few days of their contract so they will not be renewed.

There are other speculations fueled by these layoffs. Will the network move on to streaming platforms for good and abandon ESPN?s cable operations altogether? Although cable TV is still generating a lot, in the long run, it may not be a winning strategy. The performance of ESPN+ hints in that direction. Over the years, the network has preferred promoting its digital platforms over its linear network.

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