The root of ESPN's problem seems to be that what they call 'ESPN subscribers' are actually just 'cable subscribers', because ESPN is bundled with so many cable

The root of ESPN's problem seems to be that what they call 'ESPN subscribers' are actually just 'cable subscribers', because ESPN is bundled with so many cable subscriptions. The actual number of people that want ESPN is some subset of all cable subscribers. Since the only way to get ESPN right now is to be a cable subscriber, it means two things: everyone that still wants ESPN still has ESPN (because they still have cable), and all of the people unsubscribing no longer want ESPN. Note: To keep this away from pricing issues, I am excluding "cannot afford or do not want to pay the price of cable but still want ESPN" from people that truly "want ESPN". The true number of ESPN subscribers as a percentage of cable subscribers is likely going up. The cable companies probably know what this number is (feedback from set top boxes), but as far as I know don't share this data. I would assume their cost to get rights to events seems would be somewhat based on their published subscriber numbers. Since those are the wrong numbers, they are getting hit in two ways: the subsidy from non-ESPN viewers that no longer subscribe to cable is going away, and the cost-per-subscriber of broadcast rights is going up because number of subscribers (according to their broken metric) is going down. Had they just always charged for ESPN separately (meaning 100% of people who paid for ESPN wanted to pay for ESPN) it seems like neither of these things would be a problem, though, they'd have lower revenue. The market will correct itself eventually, and ESPN will either adapt by cutting their costs or they'll eventually go bankrupt.