MediaFile

ESPN’s John Skipper doesn’t see any benefits in new TV models – yet.

ESPN chief John Skipper is happy to talk to any of the so-called new over-the-top Web video players surfing around the fringes of the cable TV business. But he doesn’t see any major deals happening soon — if ever.

In a conversation with Reuters at this year’s cable show, Skipper was blunt about his skepticism over the idea his network –  the best paid in the business according to SNL Kagan data — could work with a new Web partner, a tie-up that may in some way threaten the cozy $100 billion a year cable programmer-distributor relationship which feeds the entire industry.

“We have a significant stake in maintaining the current model. There’s no advantage to us in new models that undercut what we have today,” said Skipper, speaking from the NCTA Cable Show in Boston.

ESPN pays tens of billions of dollars every year in sports rights fees to major sports and college leagues — much of which is live programming that doesn’t lend itself naturally to the subscription video-on-demand model popularized by the likes of Netflix and Amazon, he points out.

The Disney-owned sports network is the envy of the cable television business, and several major rivals, like News Corp and Comcast Corp’s NBC Universal, would love to replicate its model.

ESPN’s new Skipper comes out fighting

We had the pleasure of incoming ESPN President John Skipper’s company on Monday at the Reuters Media Summit in New York. Skipper, whose promotion was announced just ahead of Thanksgiving Day, had been the No.2  to George Bodenheimer, now promoted to executive chairman.


In the last few years ESPN has become the 800-pound gorilla in the pay-TV industry through its mix of exclusive sporting licenses with many of the top sporting leagues and events. But those deals cost money — like the eight-year NFL TV rights that cost $15.2 billion. Even Skipper, in his first interview since his appointment was announced, acknowledged the deal as “expensive” but added the caveat that ESPN generates great value from NFL rights.


The high cost of sports programming is one reason ESPN is the most expensive cable network in the US at around $4 per subscriber. Most cable networks charge a lot less than $1.


But Skipper is adamant that ESPN is worth every penny and pushed back strongly at any suggestion that cable companies could create new tiers to help customers pay less if their package don’t include ESPN.



“It’s demonstrably true that ESPN provides more value to our distributors than any other network — by far, there’s not a close second. If you survey cable, telco and satellite customers they believe ESPN provides the most value. The distributors themselves believe we provide the most value.


I reject the notion (that ESPN high cost should see it placed on higher priced tiers). I  think the current package of pay-TV products that comes through on basic cable is a high value proposition to the consumer I don’t think breaking them up is going to provide the consumer better option. If they become broken up in an a la carte world the individual channels are going to more expensive. Consumers would get less channels and pay more money.


Every distributor will do deals with us because they believe the best protection I have against cord-cutting is having ESPN.”