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ESPN’s model is eroding. Past and present leaders are divided on how to protect its rule.

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How ESPN is trying to stay relevant as cable declines

DisneyESPN is at a crossroads.

For more than 40 years, the world’s largest multi-sport network has increased its annual revenue by increasing cable subscription fees. ESPN first charged pay TV distributors less than $1 per month per subscriber in the 1980s. In 2023, ESPN’s monthly carriage fee was $9.42 per subscriber, data shows from S&P Global Market Intelligence.

This economic model is eroding. Since 2013, Tens of millions of Americans have canceled their cable TV subscription, raising questions about the future of ESPN in an increasingly fragmented media landscape. CNBC spoke with several current and former Disney and ESPN executives about the path forward for the network as part of the digital documentary “ESPN’s Fight for Dominance.”

ESPN reported that its domestic and international revenue rose just 1% to $4.4 billion in its most recent fiscal quarter. The network can no longer rely on price increases to make up the difference as the number of cable customers declines.

The company has a new two-part streaming plan to jumpstart growth. First, this fall, Disney will make ESPN available for the first time outside of the traditional cable TV package as part of a merger with Discovery Warner Bros. And Fox. The service, which doesn’t yet have a price, will target non-cable customers who want to watch sports but don’t want to pay $80 or $100 a month for a full network package.

Second, in the fall of 2025, ESPN launch its flagship streaming service this will include everything ESPN has to offer, live and on demand. It will include unprecedented customization and interact with ESPN Bet, the company’s licensed online sports betting site, as well as fantasy sports to meet the needs of younger fans. The product will go well beyond ESPN+, which exists as a $10.99 streaming service that doesn’t include ESPN’s most expensive programming, like all of “Monday Night Football “.

Jimmy Pitaro, president of ESPN

Steve Zak Photography | FilmMagic | Getty Images

“The industry is in a transition phase right now,” Jimmy Pitaro, president of ESPN, said in an interview for the CNBC documentary.

“We are seeing a decline in the traditional ecosystem, the cable and satellite universe,” Pitaro said. “There is a transition to digital. It is by far the most important element of our future.”

Pitaro and programming chief Roz Durant defended ESPN’s growth on CNBC, while former Disney and ESPN executives Bob Chapek, John Skipper and Mark Shapiro pointed out that the so-called world leader in sports faces multiple potential obstacles. as he makes his way.

Watch the documentary for the full story.

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