Bufetico
Karl Ravech called the Phillies and the Dodgers for ESPN on a Monday night in July, and by the next morning he was one of the people the network was letting go.
That Tuesday morning Jimmy Pitaro, who runs ESPN, sent the staff a memo that the Boston Globe obtained. He wrote that most of the cuts were tied to folding in the NFL Network, which ESPN had bought in January. The memo said people in other parts of the company would be told that day too. The Globe called Ravech the most established name on the list.
He’s 61 and from Needham, Massachusetts. ESPN brought him on in 1993 as a SportsCenter anchor, and he’s best known for baseball: years of anchoring Baseball Tonight, then calling Sunday Night Baseball from 2022 through 2025, until that package moved to NBC. Since 2006 he’d also been part of the Little League World Series broadcasts.
ESPN is part of Disney. About 1,000 Disney jobs had already gone in April, most of them in marketing, in the first big cut under Josh D’Amaro, who took over from Bob Iger as chief executive in March. The July round reached Pixar and National Geographic too.
What earnings per share is made of
Ravech still had games left to call. Nine days after the cuts he was back in ESPN’s booth for a Nationals-Braves game, Fox News reported. On August 5, Disney put out its results for the quarter that ended June 27. One of the first numbers in them was earnings per share. It’s the profit for a period, a quarter or a year, divided by how many shares there are, so it tells you the part of the profit that belongs to each share.
Disney’s earnings per share nearly halved, from $2.92 a year earlier to $1.51. All of the drop, and then some, comes from what was inside the profit. A year earlier the profit carried a tax benefit on paper, from a change in how Hulu is classified for U.S. income taxes. This quarter Disney took an $812 million write-down on its half of A+E, a cable TV group. It cut what that stake is worth on its books. Neither came from running the business that quarter. Disney’s own reconciliation puts last year’s Hulu item, net of a charge for a payment to acquire Hulu, at $1.56 a share, more than the whole drop. If you take it out of last year’s $2.92, this year’s $1.51 is the bigger number, even with the write-down. Before taxes, where the Hulu item doesn’t show, profit rose 14 percent.
Net income, the profit left for Disney’s shareholders, went from $5,262 million to $2,638 million. The share count moved too: averaged over the quarter, it went from 1,805 million to 1,743 million, mostly because Disney has been buying its stock back. Divide this year’s profit by last year’s share count and you get $1.46. The other 5 cents came from dividing by fewer shares.
When I read earnings per share, I split it back into the profit and the share count and follow each one over several years. Then I take out anything that didn’t come from running the business, like a tax reclassification, to see what the business earned by itself. I check the share count too, because it moves both ways. Buybacks can lift earnings per share with no more profit behind it, and new shares can pull it down while the profit grows. Disney has done both. In 2019 it paid for 21st Century Fox partly in new shares, and the buybacks it restarted in 2024 still haven’t brought the count back to where it was before that deal. I wrote about Apple and what a buyback does. The lesson on the income statement walks down the page to net income, where earnings per share starts.
Where this breaks
Most reports give two share counts. The basic one is the shares that exist, and the diluted one adds the shares employees would get from the stock awards they’re paid with. Headlines use the diluted count, and at Disney the two were almost the same.
The write-down is a harder call than the Hulu item. Disney’s line for restructuring and impairment charges, where the A+E write-down sits, has carried a charge in every fiscal year since 2019, and this quarter, the one that included April’s cuts, it also held $88 million of severance. Disney’s adjusted figure leaves that whole line out. It also leaves out the amortization of what Disney paid for 21st Century Fox and Hulu in 2019. A piece of that price is charged against profit every quarter. A charge that comes back every year is part of the business, so I leave the write-down in. The July round falls in a quarter Disney hasn’t reported yet.
Ravech in South Williamsport
At the end of August, ESPN still had Ravech in the booth for the Little League World Series, The Washington Post reported from South Williamsport, Pennsylvania. One evening, looking out over a ballfield, he told the paper he wondered when he’d be back. “It feels like home,” he said.
Pitaro’s memo tied most of ESPN’s July cuts to the NFL Network. Disney’s quarterly report shows that ESPN took over the NFL Network in January, along with the pay TV distribution of the RedZone channel and NFL Fantasy, and gave the NFL a tenth of itself for them. No cash changed hands, and Disney didn’t issue any new shares for it, so the deal didn’t change the share count. Instead, the NFL now takes its tenth of ESPN’s profit before Disney counts its own, the same way Hearst’s share of ESPN already did. Disney’s piece of ESPN is 72 percent now, down from 80.