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).
