Disney Rejects Sports-Tier TV Fees

Though there continues to be soaring prices for sports television programming, a senior Walt Disney executive doesn't believe extra sports-tier fees for TV consumers will work. "We don't see a fundamental shift to tiering being a good thing," says Jay Rasulo, senior executive vice president and CFO of The Walt Disney Company, speaking at the Goldman Sachs Goldman Sachs Communacopia event. "We don't think it's good for consumers. Subsequently, we are strongly in support the current framework and eco-system." ESPN recently extended its NFL's "Monday Night Football" deal, which according to some critics is too pricey. "MNF" has generally been the highest-viewing cable programming series. It has been reported ESPN per year fees to the NFL will go to $1.9 billion from $1.1 billion, a total of $15.2 billion over eight years.

"The whole multichannel eco-system, needless to say for a content provider, is incredibly value, and research has shown it needs to be incredibly valuable to consumers, relative to other ways, such as tiering. We need to respect that, and keep that intact and viable." says Rasulo. "ESPN has been pretty fiscally responsible."



Despite what come critics may say, Rasulo adds: "The growth rate is actually pretty reasonable, and not in excess of what we think we can get with the growth of affiliate fees." Also helping to defray the big costs is that non-game NFL programming will grow to 800 hours from 300 hours a year.

Looking at other revenue coming from TV video retailers -- retrans revenue coming to Walt Disney's ABC TV stations -- the company expects to pull in $400 million to $500 million by 2015.

Rasulo says bigger growth for the company will continue to come from international deals -- in particular from of spreading its networks into new territories. Right now, he says, Disney Channel is in 100 countries.

Surveying TV advertising, Rasulo has repeated what other senior TV executives have said. The marketplace continues to be strong both for national networks and local stations -- albeit lower and expected political advertising dollars versus a year ago.

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