The restructuring, expected to be completed in January, will combine all of ESPN's online, radio and magazine sales functions under its cable and broadcast TV operations. The plan has led to some high-profile departures, the sources said. Earlier this week, ESPN.com's former head of sales, Riley McDonough, was appointed by health site to lead sales.
ESPN promoted John Skipper to head sales for all of ESPN. Although Skipper previously ran ESPN.com, the majority of the management of the combined operation is from television and will be relocated to the TV group's offices--leaving little doubt who's running the show, sources said. TV represents the bulk of ESPN's business.
An ESPN representative declined to comment on the restructuring. The award-winning ESPN site is the most visited sports site on the Web, according to Alexa Internet. It has left long-established sports brands, notably Sports Illustrated, well behind--at least on the Web.
ESPN's rationale for the consolidation is to make salespeople "generalists" who can sell across all of ESPN's properties. The risk, however, is that the reorganization could decelerate the rapid growth of ESPN.com, one of the Web's rising stars, as it is subsumed into the slower-growing but larger TV business.
Time Inc. tried a similar plan with its numerous magazines more than a decade ago--without much luck.
ESPN's reorganization is the latest example of larger TV and print media giants assuming tighter control of their Internet businesses. Critics argue that this stifles the growth of Web media businesses, as they are called upon to help prop up growth at their more established counterparts.
Not only sales operations, but also once-stand-alone online editorial operations, are being swallowed by bigger, more established media companies.
In August,for $46.4 million, but only after the sports site made it publicly known it was seeking a buyer. Sportsline at that time owed sponsorship money to Viacom's CBS unit, which owned a stake in the company, and hoped to find a suitor to continue independent operations.
Media conglomerages are showing a growing interest in online advertising, now that the industry is rebounding. Meanwhile, sales at their newspapers, magazines and television stations are lagging. In November, financial-news publisherfor $520 million in order to tap growing online advertising dollars. Other companies, including The New York Times, also were in the running.
At ESPN, the site in 2001 relinquished much of its daily operational control to its TV counterparts in hopes of folding both businesses under common leadership. It was previously run by parent company Walt Disney's now-defunct Go Network. That restructuring was part of a trend among media companies to pull back their online operations after failing to turn them into independent businesses.
At the time, media companies such as Disney, News Corp., General Electric subsidiary NBC and Time Warner all took steps tounder the control of their traditional media organizations.