The Top 5 Reasons ESPN's Ratings Are in Freefall

A broadcast studio in Digital Center 2, a new 194,000 sq. ft  building on the ESPN campus in Bristol

In March, several outlets gleefully reported that ESPN was near collapse as a network. Conveniently, several of these reports came from competitors to ESPN who hope to capitalize and gain market share. Nonetheless, it is true that ESPN will be cutting $100 million in salaries -- most from very recognizable on-air talent -- in a cost-cutting move to shore up their bottom line.

This new report comes mere months after a report showing that ESPN is losing subscribers at an alarming rate. In November 2016, ESPN lost over 600,000 subscribers, its worst month ever. ESPN has historically been a workhorse performer, one of the most successful cable channels of all time. Driven by live events, previously unavailable sports updates, an offbeat delivery, and compelling content, ESPN reached must-watch status and stayed there for a couple of decades. At the height of their popularity, in 2011, ESPN was available in over 100 million homes. A few years ago, however, the tide began to ebb. As of December 2016, that number had dropped to 88.4 million -- a steady, inexorable decline.

This has resulted in a precipitous drop in ad revenue at ESPN and its corporate parent company, Disney. This is what is driving the next round of layoffs.

The reasons for this collapse are multifaceted. Let's examine the top reasons for the decline of ESPN.

1. Cutting the cord

Image via Wikipedia Creative Commons by SA

The phenomenon of television consumers refusing to pay cable giants for original content is real, and it's growing. Over one million American households cut the cord in 2015, opting for one of several options -- free over-the-air TV, inexpensive streaming options such as Hulu, Netflix, and Amazon Fire, or simply opting out of live television altogether. ESPN has done next to nothing to penetrate the streaming content market, which leaves them out of a large segment of younger consumers who will find other options. Until ESPN changes this approach, this will limit the number of new, young, potential lifetime consumers available to them.