by: Jayson Derrick, Benzinga Staff Writer
Walt Disney Co DIS's investors were cautioned in early March that there might be big layoffs coming to ESPN. Sports Illustrated's Richard Deitsch reported at that time that ESPN was looking to slash its payroll by tens of millions of dollars, and the sports unit's most recognizable personalities aren't immune from being laid off.
On Tuesday reports surfaced that ESPN's layoffs may be larger than previously expected. According to a Sporting News report, many on-air personalities, including those from "SportsCenter," are asking management to keep their jobs in exchange for a reduced pay.
While the on-air anchors are more than willing to take a pay cut to keep their jobs the fact remains that ESPN's subscriber losses have been hit by the cord-cutting trend. Specifically, over the past five years, ESPN's subscriber losses stand at more than 10 million and the station now reaches 88 million homes, down from a peak of 100 million.
Deitsch: 'Numbers Will Be Larger Than Previously Reported'
Nomura's Anthony DiClemente argued in a research report in March that Disney and its ESPN unit is likely looking to offset margin pressures with cost cutting initiatives but Deitsch said in a Facebook post on Tuesday that ESPN is proceeding with its layoffs and the "numbers will be larger than previously reported."
Deitsch stated that many workers could be informed of their termination as early as Wednesday while the Sporting News report believes the head-count reduction will be completed prior to Disney's second-quarter report and conference call on May 9.
"ESPN is calling this a ‘right-sizing,'" a source told Sporting News. "They're trying to focus on their core on-air talent and get the maximum amount out of them, just like everybody else does."
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