ESPN, along with basically every network on cable, is 'subsidized' by bundling. ESPN gets $7 per subscriber each month for EVERY subscriber, regardless of what proportion of them actually want to watch the channel, because it's all bundled together into a package. If the cable companies don't like it, Disney pulls all the other Disney-owned channels on their packages, which are all quite popular and gives them massive leverage over cable providers. ESPN then takes the money they get from everyone and dumps it into rights fees for sporting events, which the sports leagues then use to raise their salaries and salary caps.
Well, according to surveys, the number of cable subscribers who would be interested in paying for ESPN as a standalone streaming service is around 1 in 3. That means, if the cable bundling 'subsidy' disappeared, ESPN would have to charge $21 a month to stream their channel. If half of those 1 in 3 decide paying $21 a month for a single channel is ridiculous and that they don't want to do it, that number would then have to go up to $42 a month, and it would just snowball from there.
And while ESPN is trying to cut costs, only about $1 out of the $7 goes to producing their original content. The other $6 goes straight to rights fees and the bare minimum needed to broadcast the games, things that can't be cut without being sued or shitting on the viewer. So, as cable subscriptions continue to fall and cable providers start dropping expensive channels as a way to reduce their costs, ESPN is hemorrhaging revenue. And, once it's over, they won't be able to survive because the new business model that's going to come into effect isn't at all compatible with how much they have to pay in rights fees. And this isn't just true for ESPN, but every channel on cable dedicated to showing sports.
You're going to see sports leagues and teams collapse because of this. The NFL is the only safe one.
