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ESPN Inc.

The Worldwide Leader in Sports Amy Lian Conrad Miller Max Glassner Anthony Medori
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Amy Lian

on 3 June 2010

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Transcript of ESPN Inc.

The Worldwide Leader in Sports ORIGINS Launched September 7, 1979 with SportCenter

In 1982, ESPN aired first NBA games on cable television

ESPN2 launched in 1993, bought by Disney in 1996 Strategic Management Team:
Amy Lian Max Glassner
Conrad Miller Anthony Medori Value Chain Organizational Design Cooperation Autonomy Control Corporate Strategy Entertainment Journalism Sports Programming Competition Porter's 5 Forces 1) Threat of New Entrants
2) Bargaining Power of Suppliers
3) Bargaining Power of Buyers
4) Threat of Substitute Products
5) Rivalry Among Competing Firms Threat of New Entrants No real new entrants
3 Main competitors:
1. CBS Broadcasting Inc.
2. Fox Entertainment Group Inc.
3. The NBC Television Network
CNN/SI --> dueling potential
Turner Broadcasting --> potential to become major competitor
- Currently own NBA TV Bargaining Power of Suppliers ESPN does have power over their suppliers
They now offer ESPN insider (on their website): a more in-depth analysis of sports coverage offered for a monthly fee.
Their competitors may soon attempt to offer similar services to compete with ESPN. Bargaining Power of Buyers ESPN’s competitors gaining market share by offering similar services (like ESPN insider) at a lower price. Threat of Substitute Products Main threat of a substitute product: Sports Illustrated channel offering similar programming.
Example: a competitor's own version of SportsCenter (ESPN’s most popular show).
Shows based around the commentary of sports analysts
Example: Outside The Lines.
Online sports analysis membership similar
Example: ESPN’s Insider.
Rivalry Among Competing Firms Broadcasting:
Not much rivalry.
Fox Sports mostly focuses on regional marketing.
Versus Sports Channel (owned by Comcast) offers such sports entertainment as Bull riding and other Rodeo related events. They also air Mixed Martial Arts programming, NHL games, and college football games.

Publications:
ESPN's website does face competition from 3 main competitors.
Sports Illustrated Magazine is considered by many to be superior to ESPN’s own Magazine.
The main way for ESPN's competitors to gain more market share would be to steal games away from ESPN’s broadcasting schedule. Financial Position of ESPN 2008 vs 2009 Subscriptions According to Hearst's 2009 Review... ESPN services 15.3 Million households & has 21.8 Million viewers Disney's 2009 Annual Report Economic Crisis? According to news from January 2009...
Hiring Freeze initiated
No bonuses for top executives
- Merit bonuses for lower level staff
At least 200 positions cut
Plans for the Future Financial Times 4/14/2010 World Cup 2010 "ESPN is making its largest marketing investment in a single sporting event in its 30-year history as it looks to use the World Cup to transform the audience for football in the US." ESPN's executive vice-president expects to see ratings for the tournament improve by about 25 to 50 % over the audience figures it saw four years ago in Germany. Planning for the Future Strategic Recommendation Questions? When we last met... 3 Strategic Plans International Expansion ESPN-on-Demand Big Name Contracts 1) ESPN-on-Demand Launched Jan 13, 2010
Documentaries, sports highlights from 1979 to 2009, and the 2010 FIFA World Cup
Available only through Comcast
Increased ad revenue
Increases portability of ESPN
More limited audience
Resentment among non-Comcast customers
Will On Demand draw customers away from other video/download services?

Will ESPN provide unique content?
2) Acquiring more Big Name Contracts Increases exposure
Increases profits/ viewers / loyalty
Improves Reputation
Costly
High Competition
Difficult Maintenance
Amount of events coverable per year
Length of contracts
Revenues > Costs ?
ESPN Currently Has... X Games
SuperBowl
Wimbledon
NASCAR
Indy Racing
2010 FIFA World Cup What if They Had... The Olympics
F1 Grand Prix
Asian Games (Asia only)
Commonwealth Games (Europe only) 3) International Expansion ESPN Latin America Currently have three channels
Growth potential
One of the fastest growing subscriptions
Growth potential
More soccer coverage on ESPN and ESPN2
World Cup hook
ESPN ASIA Growth Loss of Funds Availability to TV/Sports Networks Asian Mixed Martial Arts League Similar to the past Japanese league Pride and current American league UFC.
Interest in Mixed Martial Arts is rapidly growing in both the Eastern and Western World.
League based around rivalries between country. Fighters represent their own nation. So the final recommendation is! Let's go Glo-ball!! Implementation Gain marketshare through existing international channels
Buy out popular local casters
Feature famous local celebrities
Trial Run of one to three years
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