ESPN President John Skipper sat down with CNBC’s Julia Boorstin at The Cable Show in Boston yesterday afternoon to discuss the rising cost of sports content on TV. CNBC’s Brian Sullivan said, “We all know that sports content costs are going through the roof, but ESPN is still making a lot of money for Disney, so how exactly are they doing it?” Boorstin noted ESPN is the “highest-priced network in all of cable by a long shot,” and asked Skipper, “How can you continue to raise prices?” Skipper: “We have the highest value in pay-television by far. … We get a per month sub fee commensurate with the value we bring, and sports is clearly preeminent in attracting an audience to pay television. It’s by far the favorite network among men and in fact, it was the No. 1 cable network among adults.” Regarding how the net will manage rising sports content costs, Skipper said, “While there’s a lot of attention paid right now to rising programming costs, they have risen fairly consistently over 30 years. We are very disciplined about what we can pay to acquire rights. They are increasing because sports value is increasing because it’s the only thing you have to watch live … and it’s unique content.” Meanwhile, Skipper said the net has “no plans” to offer the “WatchESPN” app on an a la carte basis because the “whole purpose of this is to continue to underpin the value of a pay television subscription. This allows you to watch ESPN on any device you want to wherever you are” ("Street Signs,” CNBC, 5/22).
VALUE OF SPORTS RIGHTS INCREASING: Skipper in a Q&A with CABLEFAX DAILY said, "The value of sports rights is going to appreciate ... because of the uniqueness and because it has to be watched live." Asked if ESPN might be broken away from the main video packages, Skipper said, “We are the single most valuable component of a pay television subscription. It won’t work for a consumer, who will end up paying more money on an a la carte basis, and it won’t work in our opinion for the distributor, who will break off its single most valuable property into a tier. We don’t think it works for anybody. We don’t think it will happen.” Asked about the threat of rivals -- such as NBC Sports and Fox -- Skipper said, “I tell people the next rights negotiation I enter into that doesn’t have a 2nd bidder will be the first. We are always cognizant of a significant number of competitors across a lot of platforms. We compete with everybody” (CABLEFAX DAILY, 5/21 issue).
