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I’m not going to sugar coat this. I’m sick to death of having to read and watch all the reports just trying to figure out how the NHL is going to be affected in all of this. The New York Post reported Quote…ESPN is scrapping its national morning radio show featuring Keyshawn Johnson, Jay Williams and Max Kellerman…. The story goes on to say that not all may lose their jobs but Kellerman seems likely to go. And another round of ESPN layoffs is expected next week.
If you don’t pay attention to the “house of mouse… you will have missed these. The 23 year tenured CFO has taken “family medical leave… but the very next release was her temporary successor and the search for her replacement. The hardship of this is that Christine McCarthy does have a very sick spouse who is in an assisted living complex, and herself has fought cancer twice. This is also the individual “credited… with outsting Bob Chapek to get Bob Iger back in the fold. Last night, Disney’s DEI director was unceremoniously walked out. These are inner circle leadership for the corporation, not just the Disney brand. All before the earnings call in a week or so.
There are write ups on the ESPN side of things that are the exact opposite of each other. I told you all that ESPN was made a separate branch of the three tiers of the corporation. Parks/movies, tv and streaming/ESPN. I will be completely fair. I reached out to someone who has actual inside knowledge and on the ESPN side of things hasn’t heard anything. I still believe the individual IP is in play and I’ll tell you more in a minute.
At least 4 executives and now multiple directors have been let go. Pixar’s Elemental (opened last weekend) is the lowest Pixar film opening in that company’s history and you almost don’t have to adjust for inflation. (The lowest was “Toy Story… in 1995, but word got out and it took off). Here’s where all of this affects ESPN. Disney is looking to save Disney right now. They have to spend between 9 and 30 million to purchase Hulu in January. If you go through the “cash on hand… meaning once you reconcile debts and cash or cash potential holdings Disney is down to about 200 million. Down from 170 billion just a few years ago. Acquisitions and streaming that is running a near a negative 1 billion dollars per quarter (they paid 70 billion for Fox, 4 billion for marvel and 4.05 billion for Lucasfilm) even as I write the stock is down to 88ish per share (from over $200 per share in 2021).
Here’s the turn around. There are increasing complaints that ESPN is being dissected because of ownership trying to save the favored brand. I don’t see a way to argue that. And, as ESPN is under the microscope the NHL just is not the golden goose there. I have give you the numbers but here they are again. Nielsen has “Sunday Night Football… as the most watched show in America at 18 million views (add in stadiums that hold a lot of people) with Monday Night football a few slots behind at 10 million views. The NBA is getting 2 million (up to 13million for the playoffs) and the NHL is getting 700k (up to 2 million at points in the playoffs. As high as 2.4). 1/6th of the NBA playoffs.
The two names I mentioned along with Victoria Alonso were big influencers. McCarthy was at one time pegged as a possible CEO. The earnings call is going to have some bad news and high level removals (again, I won’t discount Christine’s very real medical predicament) are a signal for changes. Add to that a Star Wars hotel that was shut down (estimated at least 1 billion dollar loss) and Universal has overtaken 3 over Disney’s Parks in terms of attendance with Disneyworld holding the top spot but slipping. ESPN is paying a price in all of it (not to mention Bally, I will have an update July 1).
Let’s pretend for a moment that politics don’t exist. It’s a lose/lose argument. What you have is a company firing people at every level across every piece. What is a newly realized part of all of this is that ESPN could well be a way to raise the money needed for the Hulu buy. Iger has publicly said how important it is, but the names I mentioned were also huge names in the company.
If I were an NHL owner, I’d be working hard on plan B. See if there is a road back to NBC/Comcast/Universal. But, streamline the games. A person will wrestle to find a football game. Hockey, when the model changed, seems to be suffering a dropoff as far too many networks and platforms share the league. The MLB has announced the elimination of the “blackout rules… in one of the teams that moved on from Bally. Get rid of those too.
There are companies big enough to say, “we’ll charge more and the consumer will just have to accept it…. The NHL needs a renaissance. They need to make it easier and more affordable to be a fan that can’t physically go to the games. I don’t know the answer, and it will have to be a partnership of the NHLPA and the NHL and board of governors. ESPN is going to see more cuts and we’re only halfway through the year. NHL Players are going to continue to pay escrow until new money is injected.
This should be the build up to the most exciting part of the off season. Instead of just focusing on trades and draft picks, GMs and owners are waiting for court decisions, earnings reports and sponsorship news. I’ve had a bit of push back as someone pointed out, “Bettman will just get 2 new teams and 2 billion dollars…. A billion dollar expansion gives each team about 30 million, but not all at once. Some of you remember Seattle making its last payment within weeks of their expansion drafts. Assuming 3 equal payments, 10 million is a lot to you or me. It’s about 1/5th of the cap floor and we saw from Ottawa that there is very real debt. At least 3 teams were given assistance to keep from defaulting on bills and a 1 billion dollar loan taken by the league in 2021 was to help with that.
I’d mentioned AI before. Marvel is releasing a series where the intro was done completely by AI. It looks bad, but it was cheap and quick as the writers remain on strike and it looks like the actors are going to go on strike in the coming weeks (followed by a pending producer strike). The new “Flash… movie was blasted for brief cameos by actors who have passed away (done with what they call “deep fake…). This is a long take, but it’s one I want you to have in your back pocket. I love this sport. I truly believe that hockey is the greatest sport in the world and the NHL is the pinnacle. I can’t fix this. But, I can try to get the temperature and listen.
It may sound cold, but I think the league at teams who are seriously underperforming and give options scenarios, even if that means allowing fans to buy stock in a team or adding more ownership groups. This is a great sport stuck in a place where they are the last ones to the table in terms of broadcasting. If you have ideas about what to do, please express them. No, I don’t think anyone in a league office is reading this. But, working on a solution at any level is a positive.