During Disney’s earnings call Tuesday, CEO Bob Iger found himself being asked several questions about ESPN and the recent layoffs that caused such a stir in the sports media world.
No one at Disney had commented on the layoffs until Tuesday’s call.
“A lot has been said about cost reductions at ESPN,” Iger responded to one of the questions. “We’re managing that business efficiently. We always have, we always will. Obviously, there’s been a greater need to do it given challenges in the near term, but frankly what we’ve been doing, in terms of scale and size, is not that significant given that ESPN has 8,000 employees and we reduced by 100 employees. I don’t take it lightly but, the number gets these headlines … it wasn’t a particularly significant reduction.”
Those layoffs of 100 or so employees included on-air talent such as Trent Dilfer, Ed Werder and Jayson Stark. The network was reducing payroll as it faced a decline in subscribers while at the same time paying billions per year in rights fees for professional and college sports.
But Iger said he was bullish on ESPN’s future because of the company’s continuing move into digital. After investing $1 billion into a streaming company called BAMTech last year, ESPN is hoping to launch development of over-the-top content.
“We will eventually be in a direct-to-consumer business for ESPN product, we hope to launch one on our Bam Tech product before the end of this year,” Iger said on an interview on CNBC. “We’re increasing engagement with our app significantly. With that comes not only more brand affinity but more advertising. And we’re running our business more efficiently. So we’re actually confident in ESPN’s future, we’ve got a tremendous lineup of programs, of products, of live sports. Live sports are still a huge driver of consumption.”
Even though the company surpassed Wall Street expectations for net income and earnings — they earned $2.4 billion, better than the $2.24 billion estimates — Disney shares fell 2.5% to $109.25 in after-hours trading Tuesday.