SBJ/October 23 - 29, 2006/This Weeks News

Time Warner’s Witmer won’t back down

Time Warner Cable’s new chief programming executive believes in reining in the cost of sports networks and putting them on digital sports tiers. And she won’t be shy about fighting public battles with programmers.

In other words, when Melinda Witmer takes over for retiring industry icon Fred Dressler at the beginning of the year, it will be business as usual at the nation’s second-largest cable operator.

“We’ve learned … that no one channel is all that important to our business. We’ve all seen examples.”

-Time warner cable’s Melinda Witmer
Meet the new boss, same as the old boss.

Though Witmer has been negotiating programming deals for Time Warner Cable for the last 18 months, she’s still an unknown figure to many cable programmers.

As chief lieutenant to the forceful Dressler since early 2005, Witmer worked in his long shadow. Dressler set the strategy. Witmer stayed in the background.

But now, Witmer, who joined the company in 2001, will have the spotlight, and she’s not backing away.

“Fred represented the company and our interests and our goals and the direction we want to go in,” Witmer said, in her first extensive public comments since being promoted earlier this month. “I will be doing the same thing. So if they sound like familiar themes, they are familiar Time Warner themes.”

Witmer is a mother of teens, but she describes Dressler as a classic mentor, and programming executives who have negotiated with Witmer say they see elements of Dressler’s hard-nosed style during talks.

As such, sports programmers should not expect any relief from Witmer, whose main mission will be to continue trying to pull in the cost of sports networks. And given the fact that Time Warner Cable is in the process of going public, Witmer will be called on to cut programming costs as sharply as possible.

True to Dressler’s style, sports programmers should expect Witmer to engage in public battles when necessary.

For example, during a 30-minute interview last week with SportsBusiness Journal, Witmer took pains not to mention specific programmers when talking about the high costs of sports rights. However, at one point she showed some of Dressler’s traits in saying, “We’ve learned … that no one channel is all that important to our business. We’ve all seen examples when Cox went without ESPN, we’ve seen Dish go without Lifetime. The message that the programming industry has picked up from that is that we need to have good working relationships with our distributors.”

Witmer was equally direct when asked about Time Warner’s current dispute with the NFL Network. When asked directly about the chances that Time Warner will give NFL Network carriage on expanded basic, long the coveted spot by NFL Network, she responded succinctly, “That’s highly unlikely. In our view of the world, we want to build value in our sports tiers.”

But Witmer also called for programmers to work more closely with operators, especially when it comes to new media. She complained about programmers seeking revenue from other platforms with content that Time Warner Cable has already paid for, such as broadband and wireless.

“There’s no question that we are re-evaluating that in the context of the exposure of the content,” she said. “That’s no different than if ESPN went to license games from the NBA, it’s a different value proposition if they are licensing exclusive games or if it’s not exclusive and the content will be everywhere.”

Like her mentor, Witmer plans to push digital sports tiers as a way to rein in sports costs, especially given the number of niche sports, team and college conference-owned networks in development.

“We have to be able to deliver that to [consumers] in a way that makes sense from a value proposition,” she said.

Witmer acknowledges that Time Warner Cable can do a better job of marketing the poorly penetrated sports tiers to consumers. In the past, Dressler has talked about his desire to bundle sports tiers with other Time Warner Cable services, such as broadband or telephony.

But Witmer also called on sports programmers not to dismiss the concept of sports tiers so quickly. “It’s hard for the sports industry to say that this is programming your customers can’t live without but be unwilling to then only let the customers that can’t live without it pay for it,” she said.

She also called on sports networks to show more restraint when it comes to paying exorbitant rights fees.

“Any time these programmers are making a large economic investment in future content, they are taking some risks that they will be able to monetize that,” she said.

Several programmers told SportsBusiness Journal last week that they expect to see subtle changes at Time Warner Cable with Dressler’s departure, specifically with the roles that president and CEO Glenn Britt and senior executive vice president Rob Marcus will play during negotiations.

Because Dressler had such a strong personality and had been at the job for so long, Marcus, who is in his early 40s, often deferred to the veteran executive. But Witmer has much less experience than Dressler, leading many to believe that Marcus will be calling the shots.

“Britt and Marcus will be much more involved in the affiliate deals than ever before,” one programming executive predicted.

Programmers also expect Witmer to put more of a push behind Time Warner Cable’s “Start Over” service, being tested in South Carolina. The time-shifting service allows viewers to jump to the start of any show that’s already in progress. By all accounts, viewers like the service, but thus far, most programmers have not granted Time Warner the right to use their programming for it. That will be another negotiating point in Witmer’s talks with sports programmers.

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