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SBD/May 1, 2014/Media
Disney's Iger Discusses Rising Costs Of Sports Rights, Says Field Tough For New Entrants
Published May 1, 2014
Disney Chair & CEO Bob Iger appeared on Fox Business' "Opening Bell With Maria Bartiromo" and discussed the rising cost of sports rights. Iger: "On one hand, I'm concerned about the escalating costs of sports rights, (but) on the other hand, it makes it harder for new entrants to come into the market." He said ESPN has "faced more competition to buy sports rights,” and said escalating rights fees have “actually probably lowered the growth rate of ESPN.” Iger: “But it also makes it very, very hard for new entrants in the marketplace, of which there are a few. For them to even come close to buying the profile of events that ESPN has they'd have to invest billions of dollars and lose probably hundreds of millions, if not billions, of dollars in the process." Iger was asked about the rising sub costs for ESPN: "We actually believe that as ESPN has invested more in the quality of its product and also adding new experiences like mobility to the equation, that the price-to-value relationship for ESPN, both to the distributor and to the consumers, is still very, very high. We don't take it lightly. I know there's been a lot of noise in the marketplace. A lot of that has come as a result of the regional sports networks buying sports rights for extremely high costs and trying to pass those costs onto the consumer. That is a concern to us."
NEW DEALS: Bartiromo noted the company’s new affiliate deals and asked what was "left in terms of putting that piece of business to bed." Iger: "We have a few more to go, the biggest one being with DirecTV, which we're just starting to engage with on that. We've had no problems extending our deals (because we have) good relationships, the most recent one being with the Dish Network, for instance. It was a comprehensive deal, it was very complicated and it took a long time, but it was without the public stress or strife that some companies have experienced in negotiating long-term deals and we’re confident we'll be able to come to an arrangement with DirecTV and that will get us pretty far in terms of the total distribution profile … for ESPN" ("Opening Bell With Maria Bartiromo," Fox Business, 4/30).