The nation's big cable operators "are balking" at
ESPN's plan to raise rates 20% "or more" annually through
the year 2006, and people familiar with the matter say it
"could more than quadruple the cost" of the network to
operators, according to Leslie Cauley of the WALL STREET
JOURNAL. ESPN's proposal is "causing howls" within the
cable-TV industry, "which will have to decide whether to
pass the new costs along to customers ... or to absorb them
in their own right," and some cable execs have called the
move "blatant price-gouging." The companies say the plan,
compounded over nine years, "could push the cost of ESPN to
well over the $4-a-subscriber mark." In addition, several
cable execs said that smaller cable companies "have been
informed" by ESPN that their rates "could jump as much as"
40% in the coming years. Cauley reports that to date, "only
a few big operators have signed up for ESPN's 2006 plan,
fearing they will face even higher fees later." ESPN Exec
VP/Sales George Bodenheimer declined to discuss the matter,
but said that it "hasn't set its rates beyond next summer."
He "declined to rule out" the possibility that ESPN's rates
"could exceed" $4 "over the long haul" (WALL STREET JOURNAL,
4/15). ESPN spokesperson Mike Soltys said the net effect of
the new plan on operators "will be only a few cents" per
subscriber. He added that local affils can make up the cost
with the 46 additional 30-second commercials that ESPN is
adding to its NFL inventory (Rudy Martzke, USA TODAY, 4/15).
