For more than 40 years, ESPN has reigned supreme as the king of sports media. Growing its business by consistently raising the price of its fee to cable TV providers, ESPN now generates more than $16 billion in annual revenue. But the business of media is changing rapidly. In the past decade, about 40 million U.S. households have cut the cord on traditional cable TV. ESPN must adjust to find customers that aren’t subscribing to the cable bundle as new competitors including YouTube TV, Apple, Amazon, Peacock and perhaps Netflix bid on packages of live sports. This CNBC documentary examines ESPN’s strategy to fend off larger streamers and questions its sustainability in a digital-first world.
Chapters:
Read the text below.
Fill in the blanks with the appropriate vocabulary words from the word bank provided:
to erode (2) - fragmented - subscription - reinvigorate - unprecedented - licensed - ecosystem - transition -obstacles - dominance (2)
ESPN’s model is 1.________. Past and present execs are split on how it can protect its 2.________.
For more than 40 years, the world’s largest all-sports network has grown annual revenue by increasing cable 3.________ fees. ESPN first charged pay-TV distributors less than $1 per month per subscriber in the 1980s. In 2023, ESPN’s monthly carriage fee was $9.42 per subscriber, according to data from S&P Global Market Intelligence.
That business model is 4.________. Since 2013, tens of millions of Americans have canceled their cable TV subscriptions, raising questions about ESPN’s future in an increasingly 5.________ media landscape. CNBC spoke with multiple current and former Disney and ESPN executives about the network’s path ahead as part of the digital documentary “ESPN’s Fight for 6.________.”
ESPN reported domestic and international revenue grew just 1% to $4.4 billion in its most recent fiscal quarter. The network can no longer rely on price increases to make up the difference as the number of cable customers declines.
The company has a new two-part streaming plan to 7.________ growth. First, this fall, Disney will make ESPN available outside the traditional cable TV bundle for the first time as part of a joint venture with Warner Bros. Discovery and Fox. The service, which does not yet have a price, will target noncable customers who want to watch sports but don’t want to pay $80 or $100 a month for a full bundle of networks.
Second, in fall 2025 ESPN will launch its flagship streaming service that will include everything ESPN has to offer, both live and on demand. It will include 8.________ personalization and will interact with ESPN Bet, the company’s 9.________ online sportsbook, and fantasy sports to cater to younger fans. The product will go well beyond ESPN+, which exists as a $10.99 streaming service that doesn’t include ESPN’s most expensive programming, such as all of “Monday Night Football.”
“We’re seeing declines in the traditional 10.________, cable and satellite universe,” Pitaro said. “There’s a 11________ to digital. That is by far the biggest component of our future.”
Pitaro and head of programming Roz Durant defended ESPN’s growth plan to CNBC, while former Disney and ESPN executives Bob Chapek, John Skipper and Mark Shapiro noted the so-called Worldwide Leader in Sports faces multiple potential 12.________ while it charts its path forward.