ESPN’s cable channels collect more than $5 a month from each of the nearly 100 million American households that subscribe to pay-TV, more than any other channel by far. That comes to about $6.5 billion in revenue, without even considering advertising. With an estimated value between $40 billion and $60 billion, ESPN is at least 20 times bigger than the New York Times Company, or five times bigger than News Corp. As a single asset, ESPN could be worth as much as all the other parts of its majority owner, the Walt Disney Company, combined.

In short, the 34-year-old project out of Bristol, Connecticut, is likely the most valuable media property in the United States.

The business model seems gobsmackingly obvious: buy the rights to show sports; show sports; discuss sports; repeat. What’s more, ESPN seems like just the kind of media business our increasingly atomized culture should unravel—and indeed, a vast array of single-sport channels, local sports networks, and team-specific Web sites have proliferated in recent years, many offering deeper, more finely targeted sports coverage. And yet ESPN seems to only grow stronger from year to year. Why has no one found a way to bring it down, even incrementally? The answer lies partly in a decision made nearly a decade ago, when ESPN, caught in a ratings slump nobody foresaw, guessed right in a billion-dollar version of the simplest sport there is: heads or tails.

The American sports fan is a motley species. In 2011, an annual survey by Harris Poll identified 16 sports that at least 1 percent of respondents called a “favorite,” from pro football (the most popular) to bowling. Opportunities for serving different fans through specialized coverage would seem to abound. In 2004, Wired’s editor in chief, Chris Anderson, famously advised media tycoons that the age of mass consumption was ending and that the future of entertainment belonged to companies that cultivated a “long tail” of small-market products for niche consumers.

But a decade of evidence suggests that Anderson had it backwards. It turns out that when consumers have more access to content, the superstars get more super and the big bets from media companies pay off bigger. “Demand isn’t moving to the tail; it’s moving to the head,” said Anita Elberse, a professor at Harvard Business School who skewers Anderson’s theory using evidence from television, movies, and music in her upcoming book, Blockbusters. “Movie studios are producing fewer movies, and they’re spending more per movie. It’s the equivalent of ESPN saying ‘Let’s make a larger bet on the most popular content.’”

In fact, that’s exactly what ESPN has done. John Skipper, the current president of ESPN, took over as the director of TV content in 2005, a year after Anderson’s Wired essay was published, following a turbulent time for the worldwide leader. Ratings had declined as the network wandered into the wilderness of sports esoterica, company executives told me. “We had strayed to food eating and gaming and salsa and horse racing and figure skating, and it just didn’t perform for us,” Skipper said. His plan to restore the network’s glory was so simple, it could have fit on a napkin. “I had this quadrant with two axes: young versus old, and male versus dual audience.” Skipper pushed the programming to the upper-left quadrant (young and male) with an emphasis on live sports, especially red-blooded fare like big-time college sports and obsessive summer coverage of baseball.

“We’re not looking for niche audiences,” Skipper told me. Instead, ESPN’s flagship channel seeks to maximize the odds that whenever a middle-American male tunes in, he’ll see either a major sport, or coverage of a major story line on one of ESPN’s rapidly multiplying talk shows. Once the network put this strategy in place, Artie Bulgrin told me, ratings “started to change rather dramatically.”