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Why ESPN’s $1 Billion Doesn’t Buy Independence

football game
photo by John Morgan

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.

Larry M. Elkin is the founder and president of Palisades Hudson, and is based out of Palisades Hudson’s Fort Lauderdale, Florida headquarters. He wrote several of the chapters in the firm’s recently updated book, Looking Ahead: Life, Family, Wealth and Business After 55. His contributions include Chapter 1, “Looking Ahead When Youth Is Behind Us,” and Chapter 4, “The Family Business.” Larry was also among the authors of the firm’s book The High Achiever’s Guide To Wealth.

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