ESPN has officially found its new chief in Disney executive James Pitaro, and ahead of him lies a potential minefield of high-profile streaming product launches, sports rights negotiations and sagging subscriber numbers.
It’s a big job and a daunting task, but for now Pitaro sounds up for it.
“As a passionate and lifelong sports fan, I am honored to be joining the ESPN team during such a pivotal time in its storied history,” said Pitaro in a statement. “The appetite for quality sports content across platforms has never been greater, and I am looking forward to working with the talented ESPN team as we continue to redefine the future fan experience.”
First priority for Pitaro will be getting ESPN+, the network’s upcoming $4.99 per month streaming service, off the ground and running. It’s a big launch for Disney and, judging by comments CEO Bob Iger made in 2010, one that Pitaro has long been uniquely equipped to handle.
“…Jimmy has vast knowledge of the online world and has been hugely successful at creating and building audiences around branded online content,” Iger said when Pitaro was named co-president of Disney Interactive.
According to the The Wall Street Journal, Iger and Pitaro spent a lot of time before Pitaro’s official hiring at ESPN discussing the network’s digital strategy and the importance of ESPN+. Pitaro told the publication that ESPN+ will focus first and foremost on personalization of content delivery.
ESPN+, which will include live sports not available on the linear ESPN networks as well as other programming like the 30 for 30 series of films, will be part of a newly redesigned ESPN app. The app will rely not only on ESPN+, but also on live streaming of the linear networks and expanded scores and highlights. Iger wasn’t bashful in describing the upcoming revamped app as the future.
“If anything points to what the future of ESPN looks like, it’ll be this app,” Iger said.
As if it wasn’t enough to have the very future of ESPN in his hands, Pitaro will also have to deal with ESPN’s continued subscriber declines and upcoming sports rights renewals.
Last year, all of ESPN’s top programs (the NFL, NCAA football and “SportsCenter”) saw viewership declines in the single to double digit range, according to MoffettNathanson. During the latest quarter, Disney’s total media networks' affiliate revenue rose 4% thanks to higher affiliate revenue. But that gain was curtailed somewhat by a 3-point decline impact stemming from a decrease in subscribers. As WSJ points out, the network has lost 11 million subscribers since 2011.
If those subscriber trends continue, it could make it harder for Disney and ESPN to justify the likely astronomical rates. In 2021, the NFL’s Monday Night Football package will be back up for bids. ESPN currently pays $1.9 billion per season for those games.
But when the rights come back up for grabs, Pitaro and ESPN could be facing increased competition from digital giants like Amazon, Facebook and Google. Over the past two seasons, Amazon and Twitter have won streaming rights packages for NFL Thursday Night Football and those companies could be in the mix again this year, when prices for streaming rights could go up from the $50 million Amazon paid last year.