This is a paywalled article but I'll pull some quotes.

https://puck.news/espns-layoffs-expose-a-deeper-cost-problem/

Yes, the ESPN layoffs were part of a broader cost-cutting exercise at Disney under new C.E.O. Josh D’Amaro: Pixar, Nat Geo, ABC, and other divisions had layoffs. In a memo sent to employees this week, Pitaro wrote that “most of the job impacts are tied to the acquisition” of the NFL’s media business, which ESPN started running back in January. And sure enough, around 100 of the cuts directly affected NFL Network staffers. The acquisition of a TV network led to redundancies both in front of and behind the camera—leaving ESPN with two well-sourced insiders in Adam Schefter and Ian Rapoport, for example. Did they really need a third in Tom Pelissero?

ESPN holds more big-time sports rights than any other media company, of course, and viewership is up across the board. Still, the reduction in force reflects the once-infallible business unit’s challenged economics—once a prince of the cable bundle, ESPN’s recurring revenue has been squeezed during the streaming revolution as rights fees soar and competitors abound. “This isn’t new,” said Wolfe Research analyst Peter Supino. “This is about ESPN’s cost structure, which is inflating faster than ESPN can pass through those costs to its audience. ESPN has to make a lot of hard choices. And you can see those hard choices in its decision to pass on various rights deals.”

The cost-structure dilemma, as Supino noted, has forced Pitaro into nearly impossible economic contortions. To remain competitive, the network still has to fight for talent and for rights. Last year, ESPN signed Stephen A. Smith to a five-year, $100 million deal. Pat McAfee appears to be on the cusp of a deal worth up to $65 million a year, even if that figure includes production costs. And while those agreements always get highlighted whenever there are job losses, they pale in comparison to what ESPN pays in rights. “The talent that ESPN judges to be the most important costs them, incrementally, tens of million in dollars in contract renewals,” Supino noted. “It all contributes to the bottom line. But that math is much less important than the sports rights themselves.”

ESPN has an impressive portfolio of rights, with the Super Bowl, College Football Playoff, NBA Finals, NHL Stanley Cup Finals, etcetera. But those rights aren’t getting any cheaper. It is about to renegotiate a new NFL deal, which will see a substantial increase from the current $2.7 billion annual fee. And it just ended the first year of an 11-year deal with the NBA that’s worth $2.6 billion a year. “It’s really, really expensive to do business now,” an agent told me. “And I’m not talking about all these rights that are coming up, which makes things infinitely more expensive. Fuel prices, tariffs—everything is creating havoc on business. Everyone is getting squeezed.”