ESPN’s $1 Billion Doesn’t Buy Independence

If the federal government had not banned cigarette ads on television back in 1970, would we have seen all the coverage that has since been generated about the health effects of smoking – and the tobacco industry’s systematic efforts to downplay that information?

It’s a fair question. The topic was brought to mind by ESPN’s recent decision to pull its name and logo from a forthcoming documentary about head injuries among NFL players. ESPN was apparently under pressure from its parent company, Disney, for whom ESPN represents more than half the corporation’s profit.

At first blush, it seems odd that ESPN was vulnerable to such pressure. The NFL does not pay ESPN to carry its games, the way cigarette companies paid for ads. The money flows in the other direction, to the tune of $1 billion a year that goes to the NFL. After paying $1 billion a year, you might think ESPN would have the right to do and say pretty much whatever it wants.

But that’s not the case. ESPN has built a deep and diversified franchise, with big rights packages across most major sports and an enormous nightly presence in the sports-news business. ESPN earns one out of every four dollars earned by cable stations, according to Bloomberg Businessweek; its projected 2013 revenue is close to $9 billion.

ESPN is the most valuable cable franchise around, but it is also more than that: It is arguably the most valuable sports franchise around, period. ESPN’s success in the mobile space is evidence of this; as of last year, 70 percent of sports content viewed on mobile devices was accessed via one of ESPN’s apps. That ubiquity and value makes ESPN a critical business asset for Disney.

So critical, it seems, that the company is unwilling to alienate NFL owners, even though it already has contractual rights to the sport extending nearly another decade. As John Kosner, executive vice president at ESPN for digital and print media, told Bloomberg last year, “You win by delivering what fans want, and then that becomes a fantastic advertising proposition and a great business.” Those fans, at least here in the United States, want NFL football more than they want almost anything else.

Journalistic independence has its limits, at least under corporate ownership.

Regardless of ESPN’s decision, however, the NFL did not succeed in quashing the documentary that it apparently has decided it doesn’t like. PBS’ “Frontline,” which was ESPN’s partner in producing the piece, is still prepared to air it in October. Two of the participating journalists, who are ESPN-affiliated, are also planning to release a book on the subject at about the same time.

I think most public relations executives would have advised the NFL against trying to pressure ESPN to withdraw its participation. It only succeeded in making the league look heavy-handed at best or duplicitous at worst.

The NFL can hardly deny that many of its players have suffered devastating neurological trauma. We can see such trauma happen in front of our eyes on almost any autumn Sunday. As we learn more about the long-term effects of repeated brain injury, there is no escaping the conclusion that many former players have been severely compromised for our entertainment. The big issue now is how to minimize injuries in the future; a side issue, important but not central, is how much the league knew about such injuries’ potential long-term effects in the past, and how it can help former players cope with their disabilities going forward.

But sports owners can sometimes be prone to act like they own everything, and everyone, around them. In this case, they wanted to own the story, and their corporate partners at Disney – a company which understands that it, like the NFL, is in the entertainment business – were willing to oblige.

It isn’t hard to imagine the pressure tobacco companies might have exerted on journalists if their advertising dollars had remained in play. The NFL’s pushback against this documentary leads me to believe that journalism just got lucky when the story was tobacco.

About Larry M. Elkin 564 Articles

Affiliation: Palisades Hudson Financial Group

Larry M. Elkin, CPA, CFP®, has provided personal financial and tax counseling to a sophisticated client base since 1986. After six years with Arthur Andersen, where he was a senior manager for personal financial planning and family wealth planning, he founded his own firm in Hastings on Hudson, New York in 1992. That firm grew steadily and became the Palisades Hudson organization, which moved to Scarsdale, New York in 2002. The firm expanded to Fort Lauderdale, Florida, in 2005, and to Atlanta, Georgia, in 2008.

Larry received his B.A. in journalism from the University of Montana in 1978, and his M.B.A. in accounting from New York University in 1986. Larry was a reporter and editor for The Associated Press from 1978 to 1986. He covered government, business and legal affairs for the wire service, with assignments in Helena, Montana; Albany, New York; Washington, D.C.; and New York City’s federal courts in Brooklyn and Manhattan.

Larry established the organization’s investment advisory business, which now manages more than $800 million, in 1997. As president of Palisades Hudson, Larry maintains individual professional relationships with many of the firm’s clients, who reside in more than 25 states from Maine to California as well as in several foreign countries. He is the author of Financial Self-Defense for Unmarried Couples (Currency Doubleday, 1995), which was the first comprehensive financial planning guide for unmarried couples. He also is the editor and publisher of Sentinel, a quarterly newsletter on personal financial planning.

Larry has written many Sentinel articles, including several that anticipated future events. In “The Economic Case Against Tobacco Stocks” (February 1995), he forecast that litigation losses would eventually undermine cigarette manufacturers’ financial position. He concluded in “Is This the Beginning Of The End?” (May 1998) that there was a better-than-even chance that estate taxes would be repealed by 2010, three years before Congress enacted legislation to repeal the tax in 2010. In “IRS Takes A Shot At Split-Dollar Life” (June 1996), Larry predicted that the IRS would be able to treat split dollar arrangements as below-market loans, which came to pass with new rules issued by the Service in 2001 and 2002.

More recently, Larry has addressed the causes and consequences of the “Panic of 2008″ in his Sentinel articles. In “Have We Learned Our Lending Lesson At Last” (October 2007) and “Mortgage Lending Lessons Remain Unlearned” (October 2008), Larry questioned whether or not America has learned any lessons from the savings and loan crisis of the 1980s. In addition, he offered some practical changes that should have been made to amend the situation. In “Take Advantage Of The Panic Of 2008” (January 2009), Larry offered ways to capitalize on the wealth of opportunity that the panic presented.

Larry served as president of the Estate Planning Council of New York City, Inc., in 2005-2006. In 2009 the Council presented Larry with its first-ever Lifetime Achievement Award, citing his service to the organization and “his tireless efforts in promoting our industry by word and by personal example as a consummate estate planning professional.” He is regularly interviewed by national and regional publications, and has made nearly 100 radio and television appearances.

Visit: Palisades Hudson

Be the first to comment

Leave a Reply

Your email address will not be published.


*

This site uses Akismet to reduce spam. Learn how your comment data is processed.