ESPN, the sprawling cable TV company that has become the ubiquitous source of sports news across the country, has recently gained attention for its new eye towards cost-cutting. Bill Simmons is gone. Colin Cowherd is gone. Keith Olbermann is gone (again). Two weeks ago, ESPN announced that it is reducing its work force by 4% by terminating 300 current employees. And today, the contraction continued with the announcement that ESPN would soon be shutting the long-form website Grantland.com–the baby of Bill Simmons that matured into a collection of pop culture articles mixed with detailed 3,000+ word sports analysis articles.
In December of 2001, the Journal of Finance published a study titled “A Rose.com by Any Other Name” by Michael J. Cooper, Orlin Dimitrov, and P. Raghavendra Rau that studied the bubblicious effects of companies renaming themselves something with dot.com in the name. The price of stocks adding .com gained an average of 53% above companies without the dot.com in the corporate name, and the authors concluded the following: “We argue that our results are driven by a degree of investor mania–investors seem to be eager to be associated with the Internet at all costs.” The fact that the Nasdaq took fifteen years to return to its 2000 high is a shorthand way of describing the bubble conditions that existed at the turn of the millennium.