Naperville Business Lawyer Discusses Massive Layoffs at ESPN

layoffs, Naperville business law attorneyThe multimedia network that branded itself as “The Worldwide Leader in Sports” made international headlines last month when it announced that it was laying off dozens of on-air personalities. The layoffs were not totally unexpected, as the company has been taking steps to increase its efficiency in today’s media-saturated world, but a number of the names on the list came as a bit of a surprise to long-time consumers of the network’s television, radio and online programming.

As a business law attorney, I certainly understand that, sometimes, a company must make difficult decisions to secure future success. In many cases, this means letting valued employees go even though they have not done anything wrong and, in fact, have contributed a great deal to the business.

A Cable Network in a Cable-Cutting Age

After it began broadcasting in 1979, ESPN quickly became the most prominent sports-focused network available on cable television. Originally, it was known as the Entertainment and Sports Programming Network—hence, ESPN—but the full name was dropped in 1985 when the company rebranded itself as ESPN, Inc. Since then, the network has launched multiple national and regional cable channels, a magazine, a 24/7 lineup of radio programming, a number of national websites, and several locally focused sites for major cities including New York, Chicago, and Los Angeles.

Today, however, the number of viewers watching cable television is on a steady decline—and has been for several years. Each year, more than one million American households “cut the cable” and choose to rely on streaming programming from sites like Netflix, Amazon, and Hulu. An estimated 20 percent of U.S. households—some 26.7 million homes—have decided to forgo cable. While other cable networks like HBO, Showtime, and Starz have adapted fairly well to the new model of viewership, ESPN has done relatively poorly. While live sports may not be ideal for on-demand streaming, the reality placed the “Worldwide Leader” in a difficult position.

The Fallout of Trimming Down

In late April, the Connecticut-based ESPN announced in a statement that approximately 100 people were being let go. The number represents about 10 percent of the company’s “front-facing” positions which include news anchors, show hosts, field reporters, play-by-play and color commentators, and on-air studio analysts. The casualties included NFL reporter Ed Werder and baseball writer Jayson Stark who had each been with the company for 17 years. Former NFL quarterback Trent Dilfer—who spent the last nine years at ESPN—was also among the layoffs.

Unfortunately, many of those who lost their jobs are currently under contracts which include non-competition clauses. This means that they may have trouble finding a new job in their field quickly. While they will still be paid based on the existing contracts, removing themselves from the job market could cost them future opportunities with new companies.

Looking Ahead for Your Company

If your company’s circumstances have you considering layoffs, it is important to seek legal guidance. Contact an experienced Naperville business law attorney to discuss your plans and explore your available options. We will help you make the best possible decision for your business as well as those whose jobs may be on the line. Call 630-756-1160 for a confidential consultation today.

 

Sources:

Washington Post

Sports Illustrated

Fortune