ESPN Radically Changes Its Streaming Playbook

Walking through ESPN’s sprawling campus in Bristol, Connecticut, visitors will find the sports giant’s mission statement at every turn. On the walls, in the windows, in the coffee shop: “Serving sports fans. Always. Wherever.”

It’s a humble slogan for the biggest brand in sports media, and arguably one of the biggest brands in all of sports, but ESPN president Jimmy Pitaro says it’s “more relevant today than ever before.”

Sports – like the entire entertainment industry – is going through a drastic, generational transformation: viewership is declining, cable TV is declining, and streaming is on the rise.

“If you think about it, what we’re really saying (in the mission statement) is that we need to be everywhere,” Pitaro says, mentioning streaming, of course, but also TikTok, YouTube and other platforms.

And so ESPN is changing direction, with Disney CEO Bob Iger telling Wall Street that “building ESPN into the leading digital sports platform” is one of the company’s top four strategic priorities. With ESPN generating more than $4 billion in revenue and more than $1 billion in operating income in the last quarter alone (about as much revenue as Disney’s entertainment division, which had almost twice as much revenue as ESPN), the need to secure its future becomes even more urgent.

ESPN has undergone a dramatic transformation over the past year: It’s shifting its focus toward streaming in preparation for what Pitaro calls a “flagship” service that will launch next year; it’s reworking its sports rights deals, signing key partners and firing others; and it’s changing its on-air talent roster, firing dozens of names over the past year while bringing in new ones.

In regards to the streaming launch, Pitaro says that “it’s an understatement to say that we’re all hands on deck right now.”

There will be seamless integration with ESPN’s fantasy sports product and a single sign-on for ESPN Bet, the sports betting service operated by Penn Entertainment, with Pitaro promising a “deep connection” between his program and those efforts.

There could be integrations with regional sports networks, perhaps allowing ESPN users to access regional sports network games or apps through the flagship. “We want to be at least part of the solution,” he says. And of course, the multi-view experience that’s become a staple in services like YouTube TV, allowing users to watch multiple channels at once.

And there will be artificial intelligence, with Pitaro referring to NBC’s AI-generated Olympic recaps, voiced by a digital version of sportscaster Al Michaels. “I can’t commit to that, but we think at that point we could have personalized Sports Center (powered by artificial intelligence),” Pitaro says.

But the quality of a media product depends on the content that goes into it. ESPN has made some important moves, the most significant of which was probably reaching an 11-year deal with the NBA to remain its primary rights partner, and also relinquishing rights, including those with the Big Ten.

The company’s senior executive said ESPN is focused on acquiring “must-have” channels, and while they weren’t named, those will likely include the NFL and NBA, as well as “emerging” sports that are small but growing.

As with the rest of the entertainment industry, it’s the sports middle class — too big to thrive but not popular enough to be must-watch — that’s being squeezed. Major League Baseball could fall victim to that reality, as ESPN has the right to back out of its MLB deal next year, and sources indicate it could do so (though if the opportunity presents itself, you can bet ESPN will take it).

And it comes as ESPN parent Disney is in the midst of its own big questions, with Pitaro being tossed around as a potential successor to Iger. Asked if the succession question has changed his thinking about leadership style, Pitaro said “absolutely not.”

“It doesn’t change anything. I mean, I’ll tell you without hesitation, I’m sitting in my dream job. I literally grew up wanting to work here, even in the years when I was competing with this place, I wanted to work here,” he added. “We’re at a really important time at ESPN right now, an incredibly important time. And it’s not just the flagship, but the flagship is probably the most important new initiative that we’re going to launch, and I’m incredibly excited to be a part of it.”

To that end, ESPN has also attempted to change the lineup of its on-air talent.

Dozens of on-air personalities were let go last year, including NBA chief analyst Jeff Van Gundy and ESPN veterans Max Kellerman and Suzy Kolber. This year, football analyst Robert Griffin III was let go and NFL Sunday Countdown host Sam Ponder, and sources say there could be further changes, although not on the scale of last year’s cuts.

Stephen A. Smith, First take The host who became the face of ESPN embraces the realpolitik of the television industry and isn’t afraid to address his decision to fire the company in 2009.

“People don’t often leave because of (their) talent, they’re exceptional talents who can do well in this business and do well in it. But if you look at the bottom line, the people who are dealing with the numbers, the people who are running the business, the people who are making the decisions, they look at the numbers,” Smith says. “I’ve certainly never looked at anyone I’ve worked with and said, ‘They’re the problem,’ I think was The problem is that if our chemistry isn’t what it should be, then something needs to change… They judge us based on ratings and revenue.”

To that end, the company has also hired a talented staff: former Eagles star Jason Kelce, who will work Countdown to Monday nightand former Alabama coach Nick Saban, who will appear in University Games Dayamong other new hires. And ESPN is leaning toward big personalities like Smith and Pat McAfee, and “authenticity” is a keyword that seems appropriate for what ESPN is trying to do.

McAfee is a case in point. The outspoken former NFL player has a huge following, particularly among young men (“it’s been mind-blowing and really helpful for our brand,” Pitaro says of the research the company conducted on McAfee’s influence on ESPN), and his show is simultaneously syndicated on ESPN, YouTube, and TikTok, which is unheard of for the company (it should be noted that ESPN licenses the rights from McAfee, who negotiated his deal directly with Pitaro and Iger).

He’s controversial and sometimes faces criticism for his shots or his guests (don’t be surprised if New York Jets quarterback Aaron Rodgers returns this season), but he believes — and apparently many at ESPN agree — that his style is a key part of ESPN’s future.

“I understand that you have a lot of reasons to potentially hate me. I think they are flawed,” McAfee told a group of reporters gathered at ESPN headquarters on Aug. 28. “I would appreciate it if you would give me and my guys a chance.”

And then there’s Smith, whose contract expires next year. The veteran newspaper columnist turned TV and podcast star is remarkably clear-eyed about the state of media and ESPN’s need to remain culturally relevant.

In conversation with Hollywood Reportersuggested that if he signs a new deal, “I won’t just be thinking about ESPN, I’ll be thinking about Walt Disney, I’ll be thinking about Hulu, I’ll be thinking about FX, I’ll be thinking about a lot of things I can contribute to.”

“When we talk about adapting, ESPN is adapting from the perspective of the media landscape, the emergence of podcasting and podcasters, the digital stratosphere, YouTube becoming the new television platform in a lot of people’s eyes, and adapting to a ton of competition that’s coming from other places and saying, ‘OK, how can we stay relevant and ultimately stay afloat?’” Smith adds. “That’s the challenge that ESPN faces, and I see myself as a key part of making sure that remains the case for ESPN and Walt Disney.”

While ESPN’s mantra of “serving sports fans” epitomizes corporate humility, Smith’s personality is far from humble.

“My goal is to annihilate,” Smith says of his TV competition. “Whoever comes up against me, I’m going to beat them. That’s what I try to do every day, every week, every month, every year… I’m in the best shape I’ve been in since I was 30, and that’s because I’m going to annihilate. It’s as simple as that.”

“I’m glad I’m here late at night” Sports Center presenter Scott Van Pelt joked after Smith ended the show.

It’s a dynamic that’s, quite frankly, fun to watch. And it’s something ESPN focuses laser-focused on, from personalities to debates to wardrobe.

“I call it the toy department, it’s supposed to be fun and I want our talent lineup to have fun,” Magnus says, noting that he told Kelce he didn’t have to wear a suit if he didn’t want to. “I don’t need him in a suit and tie on Countdown to Monday night desk, he’ll look like he’s going to court. I want him to feel comfortable in whatever he wants to wear, within reason.”

“Burke has done a fantastic job of putting the best people in the right places in the right programs,” Pitaro said of the changes. “I will also tell you that we feel like we have the best talent in the world, and the talent is at scale… all of our guys really resonate. We scout talent regularly and it really resonates with our sports fans.”

“I don’t want to overdo the word relevance, but we won’t be at the level we need to be if we don’t reflect the tastes of today’s sports fans,” Magnus adds. “I want our programming, and by extension our talent pool, to reflect the broadest diversity of fans that we can.”

But if ESPN wants to maintain its position, it needs people like McAfee and Smith, and it also needs to build a group of personalities that will be relevant to consumers who don’t currently pay for linear TV and create a product that will appeal to them as well.

“If you look at my kids, Netflix, Instagram, TikTok, Fortnite, they’re incredibly distracted,” Pitaro says. “So how is it possible that we can create shows like this Get up AND First take that will resonate with younger people?”

Or as Smith says of ESPN’s changing ambitions and priorities: “It’s not about figuring something out; it’s about staying current with what we’ve figured out.”

The article was co-authored by Caitlin Huston.

This story appears in the September 4 issue of The Hollywood Reporter. Click here to subscribe.