Veteran business and industry insider Jim Cramer of CNBC indicated that Disney may have plans to eliminate ESPN from its ownership umbrella — a move that would undoubtedly impact the NBA and the favorable coverage it often receives from the popular sports network.
“I think it’s really about getting rid of ESPN,” Cramer told TheStreet.com.
Disney underwent a major corporate makeover earlier this week, hiring a new distribution group to oversee commercialization of all content.
In a nutshell, Disney is expected to shift its focus to its most profitable streaming services even more than it already does.
ESPN does not meet that criteria, with OutKick’s Ryan Glasspiegel estimating the network has lost more than $2.4 billion in revenue over the past two years.
“ESPN used to be this unbelievable thing, and now it’s just a really expensive thing (Disney is) having trouble monetizing,” Cramer said. “ESPN is no longer the precious place that it once was.”
The NBA and Disney are tight, with the league holding the season restart at the Walt Disney World Resort in Florida. Multiple seeding and playoff games were broadcast on ESPN, with the Finals carried by ABC, also owned by Disney.
“There is a belief we’re saturated in sports,” Cramer said. “That ESPN is no longer integral.”
ESPN is expected to experience a major round of layoffs that, sources said, are expected to have an impact on the network’s NBA division.
ESPN’s ratings for broadcasts of NBA games were down prior to the March hiatus, then nosedived during the restart, with this year’s Finals drawing in the lowest viewership on record.
