By: Tom Malone
SportsCenter‘s controlling corporation, ESPN, rules sports media, sports journalism, and the modern culture that arises from anything sports-related. ESPN, Inc. functions as its own corporation, though it’s controlled by a corporate parent that aims to keep its sports networks atop the ratings lists.
ESPN’s Corporate Background
ESPN, Inc. rose to power in the sports media world quickly after its 1979 debut. ABC purchased the sports media corporation from Getty Oil Company in 1984. The Walt Disney Company now owns 80 percent of ESPN after its 1996 buyout of ABC, while Hearst Corporation owns 20 percent that it acquired in an early 1990s purchase from Nabisco for $170 million. ESPN, Inc. owns 50 business entities and media outlets that reach all seven continents, making it the most widespread and influential sports media corporation in the world.
As of Nov. 22, ESPN operates under CEO George Bodenheimer and John Skipper, President of ESPN, Inc. and ABC Sports and Co-Chairman of The Walt Disney Company. The Walt Disney Company’s 12-person Board of Directors controls ESPN. Board members also serve on boards for corporations such as Nike, Edison International, Starbucks, Boeing, and Apple.
According to Businessweek, ESPN acquires an estimated annual earning of “$5 billion, with operating earnings of nearly $2 billion, according to projections from various analysts. The revenues — about 60% from distribution fees and 40% from advertising — would represent about 15% of Disney’s total.”
Disney uses ESPN as an avenue for its own corporate advertising on many occasions. In an article published in UCLA’s Mediascape journal, Sudeep Sharma said, “soon after the purchase in 1996, Whoopi Goldberg sat in as a guest host for a segment on SportsCenter. Goldberg was on air to promote her starring role in Eddie, a film about a limo driver/fan who becomes the coach of the New York Knicks, which was produced by Hollywood Pictures, a subsidiary of Disney.” Even the Jonas Brothers (signed to Disney’s Hollywood Records label) have anchored SportsCenter.
Through Disney, ESPN, Inc. vertically integrates itself through production companies (Touchstone Pictures and Pixar Animation Studios), distributors (Walt Disney Pictures and Walt Disney Studios Home Entertainment), and Disney Consumer Products retail company.
As an individual corporation, ESPN horizontally integrates itself across all media platforms. ESPN controls 47 international television outlets, like ESPN2, ESPN Deportes (the fastest growing network among the Latin American demographic), and ESPN on ABC. ESPN the Magazine covers the print media facet, while ESPN Radio covers audio broadcasts in eleven countries. The relatively new ESPN3 online streaming channel plays through ESPN.com, which expands the corporation’s integration into the Internet community. ESPN produces DVDs, video games, and specialized shows such as the ESPYs and 30 for 30 documentaries. Restaurants and merchandise further expand ESPN’s diversification efforts.
The corporation utilizes advertising as a source of income in its wide variety of media markets. Popular shows, like SportsCenter and College GameDay, draw millions of viewers, giving the corporation and advertisers a large target audience of young male sports enthusiasts.
ESPN and the companies that advertise with it rely heavily on the image that it portrays to this audience. On-camera personalities present ESPN, Inc. as a “work-hard, play-hard” business entity. “It’s a tough business, but it’s a lot of fun,” said College GameDay football analyst Kirk Herbstreit in an original interview. Even a recent book about the history of ESPN is entitled These Guys Have All the Fun. ESPN, Inc. has diversified its sports media empire through the successful portrayal of this image.
Major Holdings and Mergers
In order to maintain and increase viewer potential, the sports media corporation holds contractual agreements with major sports leagues and shows. Recently, ESPN paid $2.4 billion for an eight-year contract with Major League Baseball and $8.8 billion for an eight-year Monday Night Football contract.
According to a 2004 article from The Wall Street Journal, “DirecTV right now pays Disney’s ESPN more than $300 million a year” to carry ESPN stations in its regular programming.
Even after its recent merger with NBC Universal, Comcast pays ESPN $5.8 billion to broadcast ESPN and its affiliated networks. Comcast presents ESPN with its first legitimate competition since its 1979 inception. According to Businessweek, Comcast Corporation is “the No. 1 U.S. cable operator. Looking to build a cable sports network to rival ESPN’s, Comcast is also ESPN’s biggest distributor, so its plans could aggravate what’s already a delicate relationship.”
Ultimately, Comcast or any other aspiring competitor faces a strong opponent in ESPN, a corporation that is deeply rooted in the stronghold of world sports media culture.
Original interview with Kirk Herbstreit
Those Guys Have All the Fun: Inside the World of ESPN, James Andrew Miller and Tom Shales