ESPN's Skipper Says Net Negotiates Rates With Distributors, Does Not Impose Them

ESPN President John Skipper spoke with Ina Fried at the D: Dive Into Media conference, and discussed a number of issues, including the financial state of ESPN. When asked if ESPN makes too much money, Skipper responded, "I'm not sure I understand this conception of whether or not we make too much money. The rates that we get from distributors are directly correlated to the value we provide those distributors. We actually negotiate those rates. They're not imposed, they're not stipulated anywhere." Skipper noted ESPN has been a leader in introducing new technology and said, "We were at the forefront of driving HD. We're doing more 3D than anybody else. ... We think that we're bringing great value and we're getting paid for that value." Discussing the a la carte system versus a sports tier, Skipper said, "The current bundle of 200 channels with 24/7 content is a good proposition for consumers. ... If people pay on an a la carte basis they will end up paying as much or more for less. It is a good proposition to get all of those channels for $75 a month, in my opinion." Skipper continued, "What we want to do is get in, create great product, get share and we'll figure out how to make money later. Now we have the luxury of being able to do that because we have other successful businesses, but what it results in is our ability to work across old media to new media and we want to exist in all of these places" (ALLTHINGSD.com, 1/31).