ESPN On-Air Talent About To Care About The Cord-Cutters The Execs Aren't Concerned About
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It's been more than a bit perplexing to watch ESPN, sports television giant though it may be, shrug its shoulders at the cord-cutting trend that has refused to bend to the network's pleasure. With streaming being a thing, and that super-charging the cord-cutting revolution, we've made the point for some time that the sports broadcast industry was eventually going to feel the grip of fewer subscribers, as has been the case with much of the rest of the television medium. Yet ESPN barely reacted at all to cord-cutting, other than to insist that established ratings systems are crap and that its loss of millions of subscribers over the past few years was of no concern, mostly because those subscribers were poor. ESPN President John Skipper said just last year:People trading down to lighter cable packages. That impact hasn't leaked into ad revenue, nor has it leaked into ratings. The people who’ve traded down have tended to not be sports fans, and have tended to be older and less affluent. We still see people coming into pay TV. It remains the widest spread household service in the country after heat and electricity. Yet those comments came almost immediately after a huge round of layoffs at the network in 2015, trimming the behind-the-camera staff to what is essentially a skeleton crew. Still, stock prices stalled for Disney, with much of the blame being placed upon ESPN's subscriber loss. Some market experts have made some rather bold predictions that the subscriber woe for ESPN is over-hyped, even going so far as to predict massive market gains for Disney this year. That optimism seems to be largely built on the recent investment ESPN has made into digital distribution and streaming options. But if anyone out there is buying such optimism, the executives at ESPN do not seem to be among them.Richard Deitsch at Sports Illustrated has a detailed write-up of ESPN's plans for its on-air talent in 2017 and it certainly looks like that talent is going to have reason for concern about cord-cutting that the executives lack.SI has learned that ESPN will have significant cost-cutting over the next four months on its talent side (people in front of the camera or audio/digital screen). Multiple sources said ESPN has been tasked with paring tens of millions of staff salary from its payroll, including staffers many viewers and readers will recognize. Those with contracts coming up would be particularly vulnerable, sources said. The company is also expected to buyout some existing contracts, which is something rare for ESPN historically beyond a few NFL talents. The cuts are expected to be completed by June. Sources within ESPN say that there is no set list of names yet and stressed that behind-the-scenes people will likely (key word) not be impacted by these cuts.Last month Reuters reported Disney had a lower-than-expected quarterly revenue, hurt by the drop in advertising revenue at ESPN. In addition, ESPN continues to shed subscribers at an enhanced rate, down to 88.4 million households in Dec. 2016. That number was 100.002 million in Feb. 2011. It had to happen eventually. A network can't drop subscribers at rates in the double-digits without eventually taking a hit on the ad-revenue. Couple that with the sports licensing landscape in which partnering with teams and leagues has never been more expensive and it becomes difficult to see a way out this wilderness for ESPN. And, if this seems like a terrible trend for a business generally, it's particularly bad for a brand like ESPN, whose on-air talent has always been a key part of its success. The network likes to argue that it makes the talent popular and not the other way around, and it has some recent examples that demonstrate this to some degree, but the truth is that the talent and the network are more symbiotic than that. There's a reason why the retirement of Chris Berman, annoying slogan peddler though he may be, is such a big deal. He's been a titan for the network. Replacing that while cutting pay for the on-air talent is a unenviable task, to say the least.And, just to be clear, this is mostly to do with cord-cutting and the numbers we're talking about are enormous.The most immediate causes of the layoffs are clear. Over the last several years rights fees have skyrocketed, with ESPN now paying over $3.3 billion annually just to broadcast the NFL and NBA. Simultaneously, ESPN’s subscriber count and viewership—the fabled dual revenue stream that has made it the most envied television company in the country—have tumbled. While the loss of 12 million subscribers over five years is mostly due to generalized cord cutting, and not subscribers specifically dropping ESPN, it doesn’t really matter: It still amounts to losing almost a billion dollars annually. The status quo is unsustainable, and with rights fees already locked in for several years, salaries are one of the biggest areas available to cut expenses. This how media giants die. Not quickly, or with mercy, but rather by being slowly bled to death by the reality of new times and un-adopted innovation. Sources from inside the company suggest ESPN execs weren't even discussing the cord-cutting trend until 2015. It seems that may prove to have been too late to right the ship in Bristol.
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Wolfgang Puck Battles Elon Musk's Brother Over Trademark Rights For 'The Kitchen' In Restaurant Industry
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Generic terms that are allowed trademark protection are the bane of those that still believe trademark law serves a useful function. For the law to work as intended, to protect the public's ability to know what they're buying and from whom they are buying it, trademarks need to be both unique and identifying. When the USPTO instead allows for laughably broad terms or words to be trademarked, it steals from trademark proponents the argument of utility.Take one current trademark dispute, for instance, which happily includes such big names as Wolfgang Puck and the brother of Elon Musk, Kimbal Musk. Those two are currently battling over whether or not the term "the kitchen" ought to be trademarked for the restaurant industry. Puck is opening new digs in Chicago with the name "The Kitchen by Wolfgang Puck." Musk is one of the founders of The Kitchen Cafe out of Colorado. Musk filed a lawsuit against Puck in Colorado over the trademark issue, with Puck's lawyers filing a motion to dismiss while also filing suit in Illinois to have the Chicago area be the venue for the litigation.The Colorado complaint filed by Musk's company makes the following claim.Puck's "use of The Kitchen immediately caused confusion in the restaurant industry and marketplace," according to the Colorado compliant, which The Kitchen Cafe filed against a different Puck entity, Wolfgang Puck Licensing. The claim is fairly laughable for any number of reasons. There is the generic nature of the term in the restaurant industry, the fact that the term does nothing to identify the source of the restaurant ownership, and, most importantly, the wide swath of restaurants that incorporate the term into their names. And that's the reason for Puck's desire to move the venue to Chicago. Puck's lawyer, Steve Mick, explains it nicely.Both parties have restaurants in Chicago, Mick said. "And we like the fact that within a mile radius of The Kitchen's location in Chicago, there are five or six other restaurants using the phrase 'kitchen.'"In River North, there's Lyfe Kitchen, Travelle Kitchen + Bar and Doc B's Fresh Kitchen, according to the Illinois complaint. One North Kitchen & Bar is also nearby in the Loop."That just sort of underscores our whole point," Mick said. "They don't get to elbow out everybody." And the fact that they haven't even tried is going to be a problem in the suit. If Puck's restaurants are infringing on Musk's trademarks, why aren't all of these other, longer-standing restaurants likewise infringing? The attorney for The Kitchen Cafe has an answer for this, but it's not a good answer."The Kitchen has no issue with descriptive uses of 'kitchen' that do not cause confusion, which is the case in these other instances," said Timothy Getzoff, the attorney representing The Kitchen Cafe. "In contrast, Puck's competing restaurant uses the exact same name, The Kitchen, which already has caused confusion in the market." Which means that Musk's company essentially filed a trademark suit over the word "the." That word is the hangup here, even as the overtly generic term "kitchen" is utilized all over the restaurant industry. If Musk's suit isn't a loser, then I don't know what would be. Yet, again, the ultimate blame lies with a trademark office that saw fit to grant this trademark in the first place.
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