Disney CEO Bob Iger had to know that he’d face the ESPN question this morning at the Sanford C. Bernstein Strategic Decisions Conference. The Wall Street firm has led the pack in warning that sports programming contributes to rising pay TV prices — and that could become a big turn-off for consumers in a stagnant economy. ESPN is seen as a culprit because the network and its offshoot channels account for more than 26% of pay TV programming fees, but just 5% of the ratings. But Iger stood firm, taking a page from Franklin Roosevelt by saying in effect that the industry has little to fear but fear itself. Pay TV subscribers “generally are pleased with the variety of programming that they get.” He attributed the growing complaints about sports costs to the fact that “it has been a rough economy over the last few years.” He adds that ESPN has been careful about its price increases to compensate for its aggressive investments in programming including rights for major sports matches. “We’re not trying to kill the golden goose.” Indeed, the pay TV providers who criticize ESPN may be doing more to upset the status quo when they complain about costs instead of “selling the value to the consumers.” If they want to complain about sports costs, they should train their fire on regional sports networks. “If you look at the cost of those channels vs the ratings they deliver, it’s not even close ” to ESPN, he says. But at the end of the day he isn’t concerned that ESPN — Disney’s cash cow — will be whacked as pay TV providers begin to offer low priced services without sports. In a few cases where it’s been tried (for example, Time Warner Cable offers a $40 a month package without sports) “adoption is not particularly high.”
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Iger continued to voice no-worries on other TV matters. He doesn’t fear that the shows he licenses to streaming services such as Netflix cannibalize conventional viewing. Many investors believe that ratings at Viacom’s Nickelodeon have plummeted in part because kids watch the network’s shows on Netflix. “We can have our cake an eat it too,” Iger says. Still, his policy for distributing shows to the Web “has morphed a bit from super aggressive to slightly less aggressive than we were.” He’s upbeat about a TV Everywhere application for the Disney Channel that will be available next week to Comcast customers who want to watch shows on mobile devices. Another one will be out soon for ABC Family. “We got paid by Comcast for what we called TV Plus capability.”
The Disney chief also took a measured swipe at Dish Network’s Hopper DVR which now can automatically skip past ads in recorded broadcast network shows. CBS, Fox, and NBC have sued Dish claiming the ad zapper violates their copyrights and programming agreements. Iger says Dish’s initiative is “harmful, both to our business and to theirs….But they don’t seem to care about that.” Dish filed its own complaint against the networks, including ABC, in an effort to establish that the Hopper is OK — just an automated version of what DVR users already do. “I’m confident in our position legally,” Iger says.
He declined to forecast the television upfront ad sales market. Although sales in the scatter market have been “pretty good” for ESPN and ABC, “it’s too early to tell” about the upfronts.

Mr Iger makes tens of millions and is out of touch. To cut costs, I ditch Espn most of the year, and subscribe only during football season. There are options out there, folks.
I think the fees many cable networks charge to cable and satellite operators are too high.
These networks have enough penetration that they should instead be more aggressive in perusing advertisers. After all, many cable shows have more viewers than broadcast shows, and just the other night, the first part of the History Channel’s “Hatfields and McCoys” drew far more viewers than any other cable network or any broadcast network.
But cable networks are still at a disadvantage in trying to sell spots.
I would rather pay for the regional sports channel and see the teams I am interested in as opposed to seeing teams I couldn’t care less about. I think there are few diehards who will watch random teams in sports other than football. Personnally I don’t have cable and don’t miss it at all. Let me pick the channels I want to pay for and I will connect in a minute!
The cable providers need to have ala cart pricing, let’s see what the true value of ESPN is then.
I just don’t want to pay all the $ I pay monthly for ESPN channels that Ive never turned on in 10 years
I do not watch ESPN. ESPN should be like HBO. If you want it pay extra for it. I do not watch sports! Why should I pay for it?
I am certain that ESPN has a place in the world. I am certain that they have many viewers (otherwise they wouldn’t exist). As for me I rarely, if ever, watch the ESPN channels. If it were an option, instead of being foisted upon me regardless, I would opt out. As, I said, I do not watch it. So why should the rest of my programing cost be affected by what Disney and ESPN wants?
A la carte is the future and impending demise of ESPN. This 1900′s business model worked when costs were still under a $1 per subscriber, but in trying to secure big football contracts, they have begun pricing themselves out the market at $5 per household.
Iger needs to raise carriage fees as much as possible as the subscriber base continues to slowly erode. Big renegotiations are coming at the end of the year during
football season and the hefty fees will make more MSO’s imitate Timewarners sportless packages. There is simply too much free nfl and college football on broadcast to justify ESPN. At least they will go back full circle to the little sports station that knew its place and won’t have the future revenue to extend the mindless
football contracts.
A la carte is the free market taking out the trash. Fighting it is futile as more channels will merge to
offer better programming at REDUCED cost. ESPN is a cancer that will be removed from many households in the future. Sorry Bob, the overpriced ESPN cash cow got mad cow and will slowly be put down by better channel packages.
“ESPN is seen as a culprit because the network and its offshoot channels account for more than 26% of pay TV programming fees, but just 5% of the ratings.”
Count me among those who don’t watch sports — and resent the way cable fees have skyrocketed.
Which is also why you can count me among the people who’ve cut the cord, and gone entirely online for my TV consumption.
I can really do without ESPN. I turn to the station once a year during the summer X-Games to watch the Rallycross competition. If I had the choice of lowering my bill and taking out that station, I would do it in a heartbeat.
As long as he doesn’t defend the Disneyland price increases, that would be difficult to comprehend.
You want to raise prices for ESPN? Fine.
Then you’d better make ESPN (and related channels) premium-pay channels like Showtime and HBO. I don’t watch sports at all, and have never watched ESPN–I see no reason to pay for it, cost increase or no.
I’m all for ala carte cable–my bill would go way down.
We let cable go years ago because Satellite service is cheaper, better maintained, and they offer more a la carte programming. I hear more and more people at work saying they are or have gotten rid of their cable services because the prices are ridiculous. ESPN, for example doesn’t even offer a competitive sports package. The best pro football is played on SNF on NBC and shared between CBS and FOX during the regular season. All the pro playoff games are on the major networks, CBS, NBC, and FOX. The Superbowl is also always on one of the major networks. The Olympics, both winter and summer, belong to NBC. The best in pro golf,college baseball, and college basketball all belong to CBS. All of the major sporting event championships belong either CBS or NBC. I and I’m sure millions of other Americans don’t feel like they’re missing anything special not having cable/ESPN packaging.