Disney's Iger On TV Ad Upfront: Too Early To Tell

by Wayne Friedman, May 30, 2012, 4:17 PM

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TV's upfront marketplace is underway -- but mum’s the word, at least according to one senior media executive. 

Speaking at the Sanford Bernstein Strategic Decisions Conference, Bob Iger, chairman and CEO of the Walt Disney Company, wouldn’t say much -- other than reiterating that for its two big networks, ABC and ESPN, “it’s been a pretty good scatter market.”

Iger did not provide much detail on the upfront process. “It’s very difficult to predict the upfront,” he said. “We are just in negotiation now and it’s too early to tell.” 

In talking about the overall media environment –- including media fractionalization -– Iger says: “We believe high-quality branded entertainment is going to continue to be valuable for our shareholders.”

Concerning changing digital platforms and shifting windows for programming and movie content at Disney, Iger says: “We don’t know how fast these new businesses will break down. We do know there will be new business models.” 

Speaking about the increasingly high cost of cable programming -– specifically, sports programming -- Iger wondered why cable operators in particular have been lackluster in selling sports networks to consumers, such as Disney’s ESPN.

“It’s an odd business that the very distributors of this great product complain about the costs of the product,” says Iger. “They do that more than selling the value of the product to consumers.”

Sports programming costs have been controversial for cable operators, as some have complained that sports TV fees –- and subsequent price hikes by the likes of ESPN -- have overwhelmed their operating costs. Cable operators have also complained that not all consumers want to watch sports programming.

What about consumers who don’t watch news or kids' programming? he asks. Should those channels be eliminated from cable packages? In the end, he says, viewers want choice -- and they get a good deal.

“We do not sense the typical basic subscriber is dissatisfied with their product,” he says. 

When talking about ESPN in particular, Iger has issues, especially in comparison to regional sports channels.

“ESPN gets tarred a bit by the same brush as the RSNs, and that’s unfair.” Iger says this is especially true considering that regional sports channels can cost much more, and deliver much smaller ratings than what ESPN delivers. 

 “We are not trying to kill the golden goose," he adds. "I don’t think we have been reckless about our rate increases.”

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