Sports challenge
Serious hurdles for new ESPN boss
As the new president of ESPN, Jimmy Pitaro will be asked to thread a very fine needle in trying to retain the network’s self-proclaimed title as the Worldwide Leader in Sports.
Pitaro’s charge will be to sustain ESPN’s place as a huge revenue driver for Disney — in spite of the cable and sports industries’ incessant challenges from disruptive digital technologies.
Pitaro, 48, had long been atop Disney CEO Bob Iger’s list of possible successors to recently departed President John Skipper. In fact, according to sources, Skipper for years had held off Iger’s suggestion to have Pitaro serve as his right-hand man. It would have resulted in a clear succession plan.
Instead, after letting go of hundreds of employees over the past few years, ESPN announced in December that Skipper would resign, citing an unspecified “substance addiction.”
Skipper left behind an unsteady ship, one rocked by layoffs and lacking a consistent direction in contending with rising sports fees and declining cable subscribers.
Iger is turning to Pitaro because he believes Pitaro’s technological, sports and me- dia foundation is a perfect fit for this moment.
From 2006 to 2009, Pitaro ran the Yahoo Sports site — before heading to Yahoo Media, where he set strategy.
Iger hired him to be the head of Disney Consumer Products and Interactive Media, where he met Iger’s expectations.
“Jimmy is the guy who does great deals and still manages to have everyone like him,” a person who has negotiated with Pitaro in the past said.
Pitaro will be asked to reward Iger’s faith on multiple fronts. In the spring, ESPN+, a direct-to-consumer $4.99-amonth subscription service, is set to launch. It will not include any ESPN game coverage, and Pitaro will have to manage expectations and possible confusion.
The app could ultimately develop into ESPN’s main business, but in the interim, the offering seems more niche than network.
Pitaro will have to manage ESPN+ while trying to keep ESPN’s TV subscriber base strong. The trick will be managing both successfully as they converge in the future — when ESPN conceivably could one day be a strictly direct-to-consumer product.
Pitaro will also be able to leverage the regional networks, including the Yankees’ YES Network, that Disney is set to acquire in the $52.4 billion deal with Fox. ESPN is doubling down on its core busi- ness of showcasing live games with the Fox deal, but, although these telecasts are local (compared with ESPN’s more national focus), they do arrive with the same longterm risk that ESPN faces.
With all this in mind, ESPN needs to have a firm understanding of where its business is going — and should go — soon, because its $1.9 billion-a-year “Monday Night Football” and highlights deal expires after the 2021 season.
ESPN receives a poor slate of games, while the NFL is about to strip it of its one playoff game and give it to Fox.
For years, the network’s cable right fees were tied to having NFL games, which former ESPN President Steve Bornstein expertly exploited while heading the NFL’s negotiations with the networks. While paying far more than any other network in rights fees, ESPN does not have the Super Bowl.