Inside ESPN's abrupt shutdown of dedicated esports coverage, which insiders said was 'shocking' but stemmed from business problems beyond the pandemic
- ESPN is shutting down its esports division in a move that surprised several of its editorial staffers.
- The job cuts come as part of a broader 300-person round of layoffs.
- Earlier this year, ESPN had leaned into its esports coverage as live sports shut down during the pandemic.
- "All of us working for esports thought we were working on building something that was very important for ESPN's future," one of the laid-off employees said.
- Visit Business Insider's homepage for more stories.
When the NBA, NHL, and other live sports ground to halt in March, esports took on more of the spotlight at sports-media outlets including ESPN.
The cable network started airing "League of Legends," "NBA 2K," and "Rocket League" tournaments on its secondary channel. And its esports division, used to covering events from around the world remotely, pressed on. It covered championships, livestreaming contests on Twitch, and expanded into general gaming coverage.
So it came as a big shock to some staffers in ESPN's esports division when they were told last week that their jobs were being eliminated as part of mass layoffs that cut 500 jobs across the Disney-owned company.
ESPN confirmed in a statement that it was shutting down its dedicated esports division.
"We have made the difficult decision to cease operations for our dedicated daily esports editorial and content," the company said. "We recognize esports as an opportunity to expand our audience, and we'll continue to do so through coverage from the broader team for major events, breaking news and coverage."
Those still working in the esports unit, most of whom are remaining in their roles for 60 days after receiving their pink slips, were told on Wednesday that they would no longer be producing content for the vertical, one laid-off staffer told Business Insider. This person spoke under condition of anonymity to protect future job prospects, as did three other laid-off or former staffers.
"It was kind of shocking," the person said. "All of us working for esports thought we were working on building something that was very important for ESPN's future. We really showed that during the pandemic."
ESPN jumped into esports about five years ago, when it aired its first big esports matchup, broke through with Mina Kimes' ESPN Magazine profile of gaming prodigy Faker, and started building the dedicated esports division that launched in early 2016. Other sports media companies, like Turner Sports and Yahoo Sports, also started investing more in esports around that time, signaling that the category was moving from gamer circles into the mainstream.
ESPN and its competitors were looking to esports to reach new audiences, particularly young people who were not gravitating toward sports like football and baseball as much as previous generations. But esports never became big business for ESPN, which sources inside and outside the company said likely led to the unit's elimination as it faced pressure to cut costs amid the pandemic.
"It really just felt business-related due to the pandemic," one former staffer said. "I don't know if we were losing money on esports. I know we didn't make them much money."
An ESPN spokesperson declined to comment on the financials but said: "Our dedicated, daily esports coverage ultimately was unable to achieve the reach or scale to break through or make a meaningful impact, so we've made the decision to put resources elsewhere."
ESPN's push into esports meant competing with a new set of leaner media brands
As ESPN expanded its esports coverage, the company faced an already crowded landscape of upstarts and established media brands.
The Loadout, Dexerto, Esports Insider, The Score, and The Esports Observer (owned by Sports Business Journal) are just a few of the outlets closely covering the industry. And the category has a slew of independent commentators (often referred to as "shoutcasters") who share play-by-play commentary during esports matches to large streaming audiences.
"Now you're seeing more shows on YouTube and more shows on Twitch and more shows on other streaming platforms like Caffeine," said Amish Shah, founder at the esports organization ReKTGlobal. "I think there's a different connection when they're following their favorite streamers or their favorite pros."
On YouTube, ESPN Esport's monthly viewership is small compared to some media companies in the space.
Since November 2018, ESPN Esport's YouTube page garnered 9.3 million views, according to the analytics company Tubular Labs. Competitor channel Esports Talk drew over 78 million views on YouTube over the same period, based on Tubular's analysis.
And while ESPN Esports has attracted around 62,000 subscribers on YouTube to date, The Score's esports channel has more than 1.5 million subscribers.
Still, while ESPN's YouTube subscriber numbers have lagged, some industry professionals noted that its coverage of esports has lent credibility to a category that has at times had to fight to even be considered a sport.
"It was really important for esports as a whole to have that credibility and validation from a publication like ESPN," said Cody Hock, cofounder at Up North Management Group, an upstart talent agency focused on gaming and esports creators. "Esports is still in such an infancy that there are other publications and media companies that if they want to start covering topics, there's a plethora of information and a ton of upside."
"[ESPN] really helped during the early days putting esports on the map," Shah said. "I think they're making the wrong move because everyone knows that esports and gaming is getting stronger and bigger globally."
Insiders say ESPN saw the value in esports, but business realities got in the way
ESPN's vision for esports was to tap into the new and younger audiences around gaming, some of whom weren't watching ESPN mainstays like "SportsCenter," several sources who worked in the unit said.
Total esports viewership is expected to grow at a 9% compound annual growth rate (CAGR) between 2019 and 2023, up from 454 million in 2019 to 646 million in 2023, per Business Insider Intelligence estimates.
The group intended to cover esports the way they covered other sports by writing about leagues, teams, and personalities.
While the unit launched under former ESPN chairman John Skipper, it became an even bigger priority under current boss Jimmy Pitaro, who took on the top ESPN job in 2018. In his initial address to staffers, Pitaro said esports along with sports betting were two big growth opportunities he wanted to focus on.
Under Pitaro's leadership, ESPN's presence on third-party platforms like Twitter, Twitch, and Reddit also grew. The esports unit hired in 2019 its first dedicated video lead focused on esports.
"He knew that was a digital space that we should be in," the former staffer said. "That's when we transitioned more into the digital content."
ESPN's esports team, which had about six people at the end of its first year, expanded to roughly 14 — including editors, video producers, talent — and worked with a network of freelancers. Writers including Tyler Erzberger, Jacob Wolf, and Emily Rand amassed larger followings on their beats, with Erzberger surpassing 120,000 followers on his Twitter account @FionnOnFire.
Still, there were challenges.
Esports was a harder sell for sponsors than major sports like NFL, NBA, and NHL, which had much larger followings on ESPN, two sources said. The esports team started to feel the implications of that challenge this year, as the travel budget thinned. Late last year, ESPN's partnership with HP Omen, its title sponsor for its Los Angeles-based studio, also ended, ESPN confirmed.
"Had there been a meaningful sponsor I think it would have been a more difficult argument to make to cut the entire section," said Ryan Garfat, who helped launch the section as an editor in 2016 and ran the unit for a time before departing in 2019.
ESPN's exit from esports raises questions about traditional-sports media's efforts in the sector
The laid-off staffer said ESPN's exit from esports raised questions about the viability of traditional sports outlets pushing into esports.
"For ESPN to just pull out of something that could potentially be very important for them long term kind of sends a depressing message," the laid-off staffer said. "If this big company can't sell esports … who can?"
Yahoo, another large player in sports media, also tried to win over esports audiences by hiring well-known experts like Travis Gafford and Taylor Cocke as the faces of its esports vertical. But it shuttered the unit a year after it launched, amid the company's merger with AOL in 2017.
"People have tried and people have failed," the former staffer said. "ESPN is just the latest in the long line."
Wolf, one of ESPN's top esports writers who has terminated his contract with the company, told The Minds of Media YouTube host Blake Panasiewicz that ESPN's failure in esports signaled more of a problem with its approach to covering the sector than a problem with esports media at large.
"I don't think that the failings of ESPN are indicative of issues with esports media," Wolf said in the video, published Nov. 13. "I think it is indicative of the fact that you cannot cover esports like you cover sports and expect it to work long term. Because this audience is very different in the way that they engage."
ESPN still plans to dabble in esports coverage, as the company said in its statement. "This will be through continued coverage from the broader news team as well as programming opportunities to deliver live events across our platforms," the ESPN spokesperson added. ESPN has the rights to upcoming events including NBA 2K, Madden, V10 R-League, and F1 Esports, for example.
But the people Business Insider spoke with were skeptical that the media company could maintain a meaningful foothold in esports without a concerted effort to foster that audience.
"Esports is essentially over at ESPN because of the cuts they've made," a second laid-off staffer said.
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