Wednesday, June 7, 2017

ESPN Layoffs, an unseen force behind the cord cutting

ESPN lay offs of many of the networks on-air talent of recent is an effect of cord cutting. ESPN made its revenue from tying itself to cable packages and making people who do not watch the channel to pay for it.

In 2013 Sports Writer Patrick Hruby forecasted that the ESPN Sports Cable Bubble would burst as some alternative to cable would emerge and create a new way to consume live sports programming, such as AEREO, Well AEREO was shut down by a SCOTUS decision and now that cable bubble is bursting without some alternative to cable as a means to watch live sporting events.

What is going on here?

People are ditching cable and moving to online entertainment and streaming services such as Hulu and Netflix. The largest segment of this population that is driving the cord cutting trend is young adults age 18-25, average age of people who watch broadcast sports is 55. If young adults are ditching cable for streaming services and there is no way for them to watch live events. It means that live sporting events are not an important part of their entertainment consumption.

This means that there must be some other force behind all of this. Does this mean that young people could care less about live sports. Is it all those video games taking over their brain?

No it could be that they are BURNED OUT on them, the culprit is the professionalization of Youth Sports.

Back in the 1990s the Boomer Generation took all the things they loved as children and kept them for themselves. Comic Books, Baseball Cards and Sports. Comic Books and baseball cards became about the adult collector and They took away the pick up games of their youth and replaced them with organized leagues that cared more for the needs of the adults than the children.

What does this have to do with sports, well the professionalization of youth sports has led to youth sports burnout. That is 70-75% of all children who start a sport will quit before 13, majority of that is around age 9.

That age is at the dawn of when brand loyalty and buying trends start getting cemented in. Those first generation of youth athletes who burned out in the 90's are now entering young adult hood. Now we are seeing the effects with cord cutting and other decreases in interest. The cord cutting  has caused ripples in other areas.

Brand Loyality, here is another effect of cord cutting, Live Sports are basically a delivery system for Budweiser, Pepsi and Doritos commercials. When the youth are watching Netflix Shows or playing Call of Duty these product ads are not getting beamed into their brains. Budweiser and Pepsi are now struggling to capture the coveted youth market and are making embarrassing moves such as the tone deaf Kendall Jenner activist commercial.

While there is product placement and promotional tie-in with video games, they are few and far between. You will not see Link pull out a bottle of Pepsi as that will break the fantasy world of the game without some serious narrative explanation. Cup of Noodles does make an appearance in the latest Final Fantasy.

Video Gaming is not some corrosive force on sports fandom, fact is MADDEN, FIFA and NBA Live are licenses for Electronic Arts to literally PRINT MONEY.

Professionalization is also causing another problem, reducing accessibility, with pick up games gone only about half of children play a team sport. As many families do not have the resources to pay the high fees and purchase expensive equipment that many sports such as Hockey require. Some leagues require monthly tournaments that are many miles away which adds more costs in fuel and travel expenses. The largest indicator that a someone will become an adult fan is if they played the sport as a child and due to professionalization less and less children are playing.

So far we are seeing adverse effects of this, While children in these sports leagues hit record numbers they were followed by high school tryouts hitting record lows. Less and less of those children became teens who wanted to play for their school, those who were good enough to stick with it now play for professionalized travel teams that offer face time with scouts though Elite Showcase Tournaments.

In college for the past decade less and less incoming freshmen are interested in attending their college's football and basketball games.There could also be other social and cultural reasons for this as well. (Another Article for another time)

ESPN may be the first real causality of  Professionalized Youth Sports eating the entire industry alive, its biggest victim maybe itself. It is to be seen if those 75 percenters return to sign their own children up, if they refuse we will see a burst in this bubble as well. This same generation is also being squeezed by student loan debt and stagnant wages, which will also lead to drastic birth rate drops.

To summarize this, only half of these current children play a team sport, of those who do 75% will quit and possibly never return with their if they even have any. The result there will be just too few children available to keep this industry sustainable.

If the Children go so will everything else.