Coutinho: ESPN Layoffs Did Not Have To Be This Way

As many of you know, I do work for ESPN covering the Mets but on this day many of my fellow colleagues were let go in Bristol because of poor senior management decisions. These firings were long in the works and I talked about it in my book, Press Box Revolution in vivid detail predicting these cuts would arrive soon after the publication of my book. It is one of the few things in my book I sincerely hoped I was wrong about—but it came to fruition today.

When firings of this magnitude occur, you could generally point to senior management biting off more than they could chew which clearly is happening at ESPN. The TV industry has a solid way of generating big revenue—affiliate sales coupled with advertising sales. The affiliate sales will always level off when you get to a certain point and then ad sales takes the ball and runs with it. But they can only run with it if programming costs do not soar to the high heavens quickly and at the same time, pricing and planning groups strategically build media plans with advertisers that provide the framework for consistent increases. By consistent I don’t mean dramatic—year to year the advertisers will pay a bit more but you must understand their business plans as well as your own.

It is not necessary to own EVERY piece of sports programming and pay with a blank check. Maybe you walk away from the NBA and cover it as a news event building sponsorships around that coverage. I executed plans like this in many places like IFC for instance where we rarely bought sponsorship rights for film festivals but covered it as a news event giving sponsors like L’oreal, Target, Heineken, and Porsche embedded messaging in our coverage. We also did it with coverage of The Olympics at ABC Radio where we did not have broadcasting rights but walked away with tons of sponsorship revenue coupled with very little programming costs.

This accomplished a myriad of things including having the surplus of revenue from covering the event which we then could put a portion of in future programming which would help retain our on-air experts that made the coverage sing.

The bottom line here is ESPN tried to own EVERY piece of live sports programming and did not need to as the leagues and conferences laughed all the way to the bank while ESPN continued to lose money coupled with the fact their sales strategy never made the most of squeezing every bit of revenue out of their live events. You own the NBA—make advertisers buy spots in your overnights for every spot they buy inside an NBA game. Sure-clients will walk away initially but eventually they will get the message. Make trade deals so you can use unused inventory to pay for cost of travel for on-air talent helping the bottom line. Hotels, Airlines, and travel websites are perfect partners for this—believe me I know.

I’ve heard sales executives cry about unused inventory but to me that’s always a great opportunity—treat it like having 2 seats in the back of an airplane on Christmas Eve—consumers will pay the high cost. In the advertising world, understand the last week of 3ed quarter represents the end of the advertiser’s upfront season—and if ad sales dollars allocated by Coca Cola go unused the ad agency might get a decreased deal the following year. Jump on that chance—and it has been my observation that is rarely done at ESPN.

I’ve managed sales groups and I live by a simple concept—I work for them as much as they work for me. Help them by marketing your on-air talent in such a way that advertisers consider them as important to their selling strategy as they view the programming. The people let go today at ESPN are to me, a who’s who list of people I would love to market-they are passionate about sports, great human beings, and care about the fans they reach every waking moment of their lives.

Too bad the company they worked for never quite understood that concept.

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