The NBA and Disney are going to solve their money crunch with your money

The talent layoffs are eye-catching, but Disney's profit problems spell bigger concerns for fans.

Good morning. Let’s basketball.

---

Summer Shower; Santiago Rusinol; 1891

Something that has gone underdiscussed in the newsletter this summer are the enormous changes at hand at Disney, one of the NBA’s two crucial media rights partners. The company announced major layoffs early in July, with Jeff Van Gundy and Jalen Rose being included under the axe. Van Gundy is a fairly core piece of Disney’s NBA presentation, leading analysis for the NBA Finals and myriad big games. Rose is a homegrown star in some respects, having become a staple of the network’s pre-game and halftime coverage — coverage that is almost universally derided, sure, but it’s still primetime T.V. It’s a huge deal to cut those two personalities in addition to the many writers, other on-screen personalities, and behind-the-scenes staffers.

Later in the offseason it was confirmed that Mark Jackson was pushed out of the company as well. Mike Breen is sticking around, but otherwise the entire NBA Finals booth is being replaced. Doc Rivers and Doris Burke will join Breen on the lead broadcast crew for ESPN and ABC games in the 2023-24 season. A booth featuring J.J. Redick and Richard Jefferson as analysts has moved up the pecking order, too.

We don’t know the reason for Jackson’s dismissal, or whether letting him go will save Disney any money. Van Gundy’s exit was a part of wide-ranging cost-cutting at Disney. Why is Disney cutting costs at ESPN? According to the New York Times, the network used to be a money machine and that’s no longer the case.

With its dual revenue stream — fees from cable subscribers and advertising — the sports juggernaut continues to earn billions of dollars for Disney. In the first six months of the 2023 fiscal year, Disney’s cable networks division, which is anchored by ESPN and its spinoff channels, generated $14 billion in revenue and $3 billion in profit.

The problem: Wall Street is fixated on growth. Revenue for those six months was down 6 percent from a year earlier, as profit plunged 29 percent.

Some fans loved JVG and Jackson. Some fans hated them. Some fans love Burke and some dislike her. The same will be the case for Doc, who hasn’t done broadcast for two decades. While those voices on the broadcast are important parts of the NBA fan experience, they are mostly window dressing. No one is turning on or turning off a game because of them.

What really matters here are access and attraction. Can fans access the games they’d like to watch? And can the partners — Disney and the NBA, in this case — attract fans to watch more games? This latter point is where the critiques of JVG and Jackson edge toward relevant; the argument goes that if you watch a big ESPN Friday game with those two on the call, and they spend a significant portion of airtime deriding the current state of the sport, does that lead fans watching to also think poorly of the current state of the sport and not tune in next time?

I think that potential is completely overblown. First, many fans are only half-listening (if at all) to the broadcast for most games. Their fandom can’t possibly be impacted by comments they aren’t even hearing. Second, people are not mindless drones that agree with everything spoke to them through the T.V. box. Third, the percentage of the time that JVG and Jackson were being negative was not as large as many close watchers and league boosters indicate. When there was a potential flagrant foul? Sure. An outrageous call? OK. But I’d argue JVG and Jackson were just as likely to celebrate a current star as they were to rip the league. (They were also as likely to go off on a weird tangent, which is often an opportunity for funny moments.)

Attracting fans to watch more games is a much broader task for the league and its broadcast partners that stretches well beyond the in-game commentary.

Where fans need to be most nervous — where I’m most nervous — is in the access piece.