A Substitute for War

Basketball philosophy

What does losing Bill Simmons cost ESPN?

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ESPN made headline news by announcing Bill Simmons won’t be back when his contract expires this fires. From the abruptness of the announcement and its timing after Simmons discussed Roger Goodell on the Dan Patrick Show it has the feeling of a pseudo-firing.

In reaction some sites have pointed out the lack of revenue Simmons provides to Grantland for a salary like 5 million a year. Grantland focuses on column quality rather than revenue-centric clickbait and its podcast popularity is difficult to monetize.

But this may not capture all the financial value Simmons brings to Grantland. Compare ESPN to a Vegas casino. Simmons and Grantland are like the entertainment act. Think Celine Dion or Cirque de Soleil. While these casino’s shows may make solid ticket gate, the combined revenue of the gambling games, the hotel and food/beverage presumably dwarf the revenue the casinos make from its acts. Likewise where ESPN really makes its money is television subscriptions and ads, followed by the digital ad traffic from ESPN.com, a leading source for checking sports, breaking news and highlights.

Yet judging the value of the casino’s entertainment like Cirque de Soleil isn’t just about the gate. All the revenue is connected. A customer could spend $200 on the entertainment and $1000 on the gambling, hotel rooms and food. The entertainment’s value is bringing a customer into the casino to spend money on everything else, not just what they spend on the tickets.

Likewise the value of a Simmons fan is not just the direct traffic on his articles and podcasts. ESPN’s revenue is connected. Almost every Simmons fan is going to need other services to meet their sports needs, from checking scores and news to choosing sports television products. A Simmons fan has bought into the ESPN product and has it reaffirmed through articles, podcasts and tweets that they are the #1 sports empire to align themselves with. This indirectly could lead to them choosing ESPN as their site to check scores and news or their channel to watch television sports products on. The popularity of a writer like Simmons increases the brand popularity of ESPN. Increasing the brand popularity of ESPN has benefits across the board including more revenue-friendly areas than Grantland, such as television and homepage digital ads.

ESPN will continue to sell itself as the #1 sports brand in the world without Simmons and Grantland will continue to have popular writers other than him. But where the damage may be is where he goes next. Simmons on Fox Sports or Yahoo Sports changes their reputation and brand-noticeability level. The most popular sports writer and podcaster in the country on another site means ESPN’s brand has less legs to stand on when calling themselves the #1 and only sports choice. This will be made more true if other Grantland writers follow him to his next site or if he has the power to quality writing hires like he did running Grantland. ESPN isn’t going to sweat the hit in article and podcast traffic, but if Simmons shifts momentum to a competitor the real cost could the entire brand taking a hit, including the television and home website revenue.

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Written by jr.

May 14, 2015 at 12:55 pm

Posted in Uncategorized

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