Disney to weigh two internal candidates to lead ESPN after president’s resignation

Skipper discloses he has substance addiction

LOS ANGELES/NEW YORK • Walt Disney Co. will probably look at one of two internal candidates to lead ESPN, according to a person with knowledge of the matter, after John Skipper unexpectedly stepped down because of a substance addiction.

Programming boss Connor Schell and distribution chief Justin Connolly are likely internal candidates, as is acting Chairman George Bodenheimer, said the person, who asked not to be identified because process is only just starting. An outside candidate is also possible, the person said. Disney has outlined a 90-day timetable for finding a replacement.

Skipper shocked the sports and entertainment world Monday with his sudden resignation and admission of an addiction problem. He’s led ESPN, Disney’s groundbreaking sports operation, since 2012 and has been with the network for 20 years. Once a profit machine, ESPN has been unable to stem the loss of subscribers and advertising to new media like Netflix, Facebook and YouTube.

At the same time, the cost of sports rights has spiked, with the network facing new competition for sports rights from technology giants Amazon.com Inc. and Facebook Inc. Ad sales and profit have slumped at ESPN for the first time in years.

Bodenheimer, 59, will serve as acting chairman until a permanent successor is named, the network said in a statement at its website. Skipper, 61, renewed his contract only last month in a deal that would have extended his tenure through 2021.

“I have struggled for many years with a substance addiction,” Skipper said in the statement, without being more specific. “I have decided that the most important thing I can do right now is to take care of my problem. I have disclosed that decision to the company, and we mutually agreed that it was appropriate that I resign.”

Skipper had been seeking to gird ESPN against the industry’s changes by reconstructing “SportsCenter,” the network’s flagship show, around personalities, an effort to lure consumers who could otherwise just watch highlights on their phones. ESPN is also developing an online service of its own, ESPN Plus, which will be introduced next year.

“I’ve stayed in close contact with John, and I believe in the direction he’s taking ESPN,” Bodenheimer said in the statement. “He’s assembled an outstanding leadership team — many of whom I know very well — and I am extremely confident we will work together effectively to move ESPN forward during this transition.”

ESPN named Schell to oversee programming in June as part of a management shakeup at the network. He previously led ESPN’s film division, helping the network win its first Oscar this year for an O.J. Simpson documentary, and has been in charge of original TV programming. He’s credited with helping to shepherd the network’s “30 for 30” documentary series.

As part of the changes announced at the time, ESPN appointed Connolly to oversee distribution of ESPN’s programming across all payTV and digital platforms. That’s made him frontman with pay-TV operators, whose monthly fees contribute the majority of ESPN’s sales. Media networks led by ESPN contributed 47 per cent of Disney’s operating profit last fiscal year and 43 per cent of its US$55.1 billion in revenue.

Turmoil in the TV business led Disney last week to clinch a deal to buy a large portion of 21st Century Fox Inc. for US$52.4 million, a sale that includes all of Fox’s regional sports networks.

“I don’t think it is material to the stock as ESPN is more than one person,” Paul Sweeney, analyst at Bloomberg Intelligence said. “That said, ESPN is facing an increasingly competitive marketplace, so management stability is important.”

Whoever gets the top job will be taking over a much different ESPN than Skipper did, with a more constrained chequebook. The network began a round of layoffs just weeks ago, cutting 160 positions, or about two per cent of the workforce, because of declining viewership and rising program costs.

The network also fired about 100 staffers in April, ESPN president John Skipper had led the ailing sports giant for four years and was with the network for 20. including football reporter Ed Werner, baseball writer Jayson Stark and hockey correspondent Pierre LeBrun.

Skipper, who majored in English literature at the University of North Carolina at Chapel Hill, joined ESPN after a career in magazine journalism. A veteran of Rolling Stone, Us and Spin, Skipper joined Disney’s publishing group and then helped oversee the debut of ESPN’s magazine.

The title won a National Magazine Award just two years after its debut, and its success helped Skipper ascend the ranks at ESPN. He added oversight of the network’s website in 2000, advertising sales in 2004 and oversaw all content starting in 2005.

“I join John Skipper’s many friends and colleagues across the company in wishing him well during this challenging time,” Bob Iger, Disney’s chief executive officer, said in the statement.