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Volume 24 No. 156

SMT Conference

ESPN President John Skipper, facing the most turbulent series of events since taking over leadership of the sports media giant, vigorously defended the company’s audience and talent development, journalistic standards, and future growth prospects in a featured one-on-one interview today kicking off the '15 NeuLion Sports Media & Technology Conference. Despite declining numbers of cable subscribers to ESPN and recent layoffs of approximately 300 employees, Skipper said he “really likes the hand we have,” saying repeatedly the company has been assigned with “false narratives.” “We do not have a narrative problem. We don’t have a narrative of declining usage at ESPN, and we are not retrenching,” Skipper said, citing in part ESPN’s sports industry record digital metrics of more than 94 million people and 10 billion minutes of consumption in September, as well as ESPN’s status as the most-watched U.S. cable channel. “We are adding viewers on other platforms to supplement our performance on TV. What we have is an internal narrative of continued dramatic success.” While Skipper called the recent layoffs “the most difficult week of my tenure,” he bristled sharply at the idea that the departures of personalities such as Bill Simmons, Colin Cowherd and Keith Olbermann represent a talent drain for ESPN. Skipper particularly shot back at the suggestion that Simmons did not receive sufficient internal support and promotion for Grantland. “It is completely inaccurate to say that Bill Simmons and Grantland didn’t get enough support,” he said.

THOUGHTS ON DAILY FANTASY: Skipper said he remains “very happy” with ESPN’s current advertising-based relationships in daily fantasy sports, despite recent turmoil in that industry. While he expressed relief that a potential equity investment by the Walt Disney Co. into DraftKings instead turned into a marketing-based deal across ESPN platforms, Skipper affirmed that ESPN’s current level of activity in daily fantasy will continue and, like NBA Commissioner Adam Silver and MLB Commissioner Rob Manfred, reiterated his support of daily fantasy. “I know (FanDuel CEO) Nigel Eccles and (DraftKings CEO) Jason Robins well, and I am confident they will navigate the current level of noise,” he said. “I’m convinced this is a game of skill ... but I’m not positive that really matters.”

Other Highlights:
* Skipper shot back at IAC Chair Barry Diller, who has accused of ESPN of operating in a “false economy.” “That is an inaccurate, inappropriate, woefully uninformed narrative, one I would submit is willfully so,” Skipper said. “I would ask that he stop flapping his lips.”

* Despite having, to many observers, a far weaker slate of NFL games than any other NFL broadcaster, Skipper claimed the network is the most financially successful with its rights. “We monetize every bit of our NFL spend,” he said. “Our ROI is higher than anyone else’s.”

* Skipper said criticism of ESPN’s reporting of “Deflategate” was “ridiculous,” and particularly cited the quality of work by reporters Don Van Natta Jr. and Seth Wickersham on the story.

* He expressed no fear of newer broadcast and media technologies, such as virtual reality and Meerkat. “We are not afraid of disruptive technology. We work hard to adapt to it and use it to better serve our fans,” he said.

The pace of cord cutting is accelerating, but the trend offers opportunities to engage with consumers and reach them in new ways, said a panel of programmers and distributors today at the '15 NeuLion Sports Media & Technology Conference. “It is happening,” said Verizon Exec Dir of Content Strategy & Acquisition Ben Grad. “Few people will be interested in a bundle that is three digits.” Time Warner Cable Exec VP, Chief Content Officer & COO Melinda Witmer said cord cutting “is accelerating, and it feels like the pace of acceleration is taking people by surprise, more than that it is happening.” She added, “The overall universe we referred to a few years ago of 104 million households is below 100 million now, so I think those numbers tell themselves.” Tennis Channel Chair & CEO Ken Solomon said cord cutting presents chances to reach a new audience, but one that may not sit on a couch and watch linear TV. As if to make the point, he held up his smartphone, which was streaming the WTA Finals from Singapore. The trend in future years is customization and curation, he said, meaning allowing consumers to pick and chose not only what they want to watch, but on which devices. Witmer likened the future of video to, which gives consumers nearly unlimited options. “Customers will increasingly choose their interface,” she said. However, this new universe could pose a threat to advertisers, she added, as customers choose to buy video and watch it on the go. Witmer also runs TWC's regional sports channel business, which includes SportsNet LA. That channel was launched in February '14 in alliance with the Dodgers and is not distributed in 70% of that market. She stood by the company’s pricing demands, calling them consistent with the industry.

SPORTS STILL CRUCIAL PART OF PACKAGES: The panel members all agreed that sports will remain a crucial element of most video packages. Tribune Media President of Distribution Dana Zimmer said her company has had increasing success accumulating local TV rights, including the Yankees and Mets. In the future, she expects new entrants from the Internet universe to emerge in programming and distribution. But echoing the theme of the morning, she added, “These new entrants are not necessarily disruptors, but opportunities.”