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REPORTS OF ESPN'S RATE INCREASE RAISES IRE OF CABLE INDUSTRY

          Reports that ESPN will "hike its rates" by 20% on
     August 1 and implement an annual 20% increase until 2006 has
     drawn reaction from the cable industry, according to Richard
     Sandomir of the N.Y. TIMES.  ESPN, which paid $600M for
     exclusive rights to Sunday night NFL games, now has $469M a
     year in added costs.  Sandomir: "Yes, it makes sense for
     ESPN to charge more for the full package.  It only charged
     for half before."  But one cable operator, who requested
     anonymity, said, "It's [20%] now and forever.  We're being
     handed this to eat.  Their rationale is we'll get more
     commercial time and we should get a giveback from TNT."  TNT
     spokesperson Greg Hughes: "Why should we underwrite ESPN's
     outrageous overpaying for the N.F.L.?"   Time Warner Exec
     Dick Aurelio: "There's an impression that sports rights fees
     are going out of bounds, but nobody has the guts to do
     anything about it."  ESPN "will try to offset any possible
     rate increases" by offering cable systems more ad time than
     was previously available on the Sunday night package.  But
     the anonymous cable operator said, "The N.F.L. is more
     valuable to ESPN than it is to us.  Having more commercial
     time doesn't create one new advertiser for me or increase
     the budgets of existing advertisers.  What will happen is
     local advertisers will have to pay higher rates from us. ...
     How did cable end up having to pay the most money for the
     least valuable games?  Sunday night games are like the last
     on the list" (N.Y. TIMES, 4/17).
     

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