Jeff Van Gundy. Max Kellerman. Suzy Kolber. These are just some of the biggest names at ESPN, a Disney (NYSE:DIS) property. And now, they’re also some of the names you’ll never see at ESPN again. At least, not anytime soon. They—along with around 17 others—were all laid off via a Friday morning memo that cut their time at the sports network short.
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Reports note that the contracts those 20 employees had will be honored. Meanwhile, other contracts that are about to come due won’t be renewed. Some investors—like a Seeking Alpha report—note that the cuts come just ahead of plans to break ESPN off of Disney and into its own separate reporting unit. Kellerman and co-host Keyshawn Johnson—also out at the network—were both dismissed a week after news broke that their morning radio show was shuttered. Kolber, meanwhile, had 27 years with ESPN.
The likely motive behind the cuts: money. An ESPN statement not only pointed out the “small group of job cuts,” which includes some of ESPN’s most high-profile and longest-lived—and therefore likely most expensive—employees, but also “…an ongoing focus on managing costs when we negotiate individual contract renewals in the months ahead.” ESPN has had its share of financial problems before, but with Disney actively trying to improve its media cash flow—particularly with advertisers reconsidering in the face of a likely economic downturn and people departing regular television, cable or otherwise—now is the time for particular cuts.
Meanwhile, analysts are giving Disney the benefit of the doubt, at least for now. With 12 Buy ratings and five Holds, Disney currently sits as a Moderate Buy. Further, Disney stock offers its investors a healthy 35.87% upside potential thanks to its average price target of $121.47.
