James Andrew Miller: ESPN Executive Shake-Up Ushers in "New World Order" (Guest Column)
John Skipper confronts declining subscriber numbers, soft ratings and rising rights fees and possibly anoints a successor with three promotions.
Although John Skipper became president of ESPN in January of 2012, he would make so few personnel changes in the top ranks of the company over the next several years that observers could have been forgiven if they thought that George Bodenheimer, Skipper’s predecessor, had never left office.
Skipper’s earthshaking announcement June 16 of promotions, realignments and farewells amongst senior executives is in part admission that the old architecture wasn’t working — and also in part, Skipper’s bold blueprint for the future. Either way, ESPN’s "new world order" finally looks like a company run by John Skipper.
He has to know better than anybody the challenges that ESPN faces and the necessity for putting together the best possible roster if he’s going to steady what has appeared in recent years a somewhat shaky ship, one facing troubled waters and rocky shores, to stretch the metaphor. Though still hugely profitable (Disney reported $6.7 billion in operating income for its cable properties in 2016, of which ESPN accounts for about half), the company has lost roughly 12 million households that were paying about $7 a month for ESPN whether they watched it or not, an arrangement ideal for the company but not appreciated by increasing numbers of disgruntled cable subscribers.
Add to that situation ever-increasing rights fees, the fact that its premier franchise, SportsCenter, is no longer the go-to-destination for sports fans that it was, and — perhaps most important — ESPN is no longer able to guarantee huge cash deliveries to parent company Disney (lately, in fact, they’ve been a drag on the company’s earnings). And there you have it: a formidable challenge ahead for any management team.
The big headline is that Skipper, 61, has finally found a Skipper of his own: Connor Schell, 40, who will be one part of a new three-headed leadership monster that will serve Skipper and help him lead ESPN employees into its ever-clouded future. Schell is the newly minted executive vp content, and he will operate alongside Burke Magnus, executive vp programming and scheduling; and Justin Connolly, executive vp affiliate sales and marketing of ESPN.
Schell’s turf will expand beyond his domain at ESPN Films, Original Content, Audio, and ESPN’s Talent Office and encompass all studio and remote production, along with digital and print content creation. Schell first garnered outside attention when he co-created ESPN’s hugely acclaimed 30 for 30 documentary series with Bill Simmons, and was part of the team that won ESPN its first-ever Academy Award for O.J.: Made in America.
Magnus will henceforth be responsible for ESPN’s program acquisitions and rights holder relations, as well as content strategy, scheduling and the company’s role in Disney’s partnership with BAM Tech. And Connolly has oversight of distribution for all Disney and ESPN Media Networks amid an already lengthy list of responsibilities and continue to be the key partner to Kevin Mayer, head of Disney Strategy
Skipper included a dose of bitter medicine for himself in the announcements, which can’t have been easy for him. He bid farewell to two of his closest lieutenants throughout his presidency — Marie Donoghue and John Kosner will both be leaving the company.
Donoghue, whom Skipper championed unwaveringly until the end, had survived a vote of no-confidence from none other than the powerful Bill Simmons when he was at the network, yet ironically she couldn’t excel in a post-Simmons world. Key executives inside the company lacked faith in Donoghue’s expertise or resented her management style, or both. (Added Skipper about Donoghue: "During the 17 years I have worked with Marie, she has proven to be creative and forward thinking, with unique insight across evolving and traditional media. She is a dedicated, talented, seasoned executive and I look forward to her counsel.”) Given his commitment to female empowerment, the fact that Skipper’s trio at the top now consists of three white males must be frustrating for him.
One could argue that Kosner’s departure is just as much his decision as Skipper’s, since it’s doubtful Skipper would have ever axed Kosner on his own. But he must have known that he was making it unlikely if not impossible that Kosner would agree to report to Schell after having had a privileged direct line to the big boss.
There’s an arguable Machiaveillian subplot to the new organizational structure: It leaves no room anywhere for anyone else to play a significant role at the very top of ESPN. If someone outside the company were being groomed or considered for a very important position, well, tough; that person has in effect been locked out, unless they’re willing to settle for the duties of a bathroom attendant.
Skipper has in effect sealed the place from outside forces and made it clear that it’s his company, and his team to be filled with his players and no one else’s.
And that suggests another important dynamic emerging from the reorganization: all three of those at the top are high-quality execs, but none can be seen as fully prepared to take over from Skipper anytime soon. That means that Skipper, whose contract could be up as early as the end of this year (or the end of ’18 at the latest), has probably secured an extended longevity for himself at the company, perhaps one last contract that will run for three or four more years.
Disney shareholders should hope that Connolly, Magnus and Schell spend more time in their respective lanes than jockeying for Skipper’s perch. If a new boss had to be named today, Connolly would probably be the crowd’s pick based on his experience with aspects of the company that are at the heart of future threats and disruption. But Friday’s changes do, at least for now, create the strong possibility that Skipper’s successor will come from inside the company. Giving each of the three men so much consolidated power will be a keen way to evaluate their potential at eventually running the place.
In the end, it all comes down to Captain Skipper. He’s had a much tougher presidency than any other ESPN president except for Chet Simmons, who helped launch the company and was entangled in financial uncertainties, warring investor egos and a crucial shortage of product. Skipper has to write a new chapter filled with success while being mindful that in a few short years, ESPN’s deals with the NFL, baseball and other big-time acquisitions will be up for grabs.
How many of those prize packages ESPN will be able to renew or secure, and at what cost, will be a critical piece of the future’s pie. Others can help him out, but it’s a pie that has to be Skipper’s for the baking.
James Andrew Miller is an award-winning journalist and author of the New York Times best-seller Those Guys Have All the Fun: Inside the World of ESPN.