Disney CFO Touts ESPN's Status

Jay-Rasulo-AWalt Disney Company executives aren't worried about upcoming sports TV competition for its big ESPN brand.

A number of media companies have either started up or revamped their networks to take on ESPN, the big leader in cable TV sports. This includes NBC Sports Network and the upcoming Fox Sports 1, among many new sports channels.

But Jay Rasulo, senior executive vice president/CFO of Walt Disney Co., speaking at the Nomura Global Media and Telecom Summit on Thursday, says there won't be a contest to unseat ESPN's position.
"There may well be a very fierce battle for a distant No. 1," he says. "People are going to spend a lot of money for rights, but they are going to end up a distant No. 2."

"We are not complacent; we look at everything that comes up," says Rasulo. Recently, ESPN secured the rights to air the entire U.S. Open tennis event. The event's key semifinals and finals event previously appeared on broadcast network CBS -- since 1968.

Rasulo notes: "ESPN is one of the most predictable businesses." For example, 70% of its affiliate deals are done in eight- to-10-year pacts. He says a little more than 30% of its revenue comes from advertising sales.

Asked whether proposed legislation changes would institute a la carte programming and other major programming-TV distributor changes -- as well as "cord-cutting" activity -- Rasulo says there hasn't been any real concrete thinking behind this.

"In an a la carte world, consumers will wind up paying more for less available content. .. If you look at ESPN's subscribers over the last two years, there has not been a net change. We still believe there is value there for consumers," he says.

Rasulo says new digital viewing of its networks, ABC, ESPN, and others on tablets is being sold with advertisers paying high value. As with other media companies, he expects third-party measurement companies to help boost a more standard viewing data and advertising activity.

As to other elements of the company, Rasulo says following on the back of its $1.5 billion box-office revenue for "The Avengers" last summer, its other Marvel franchise, "Iron Man 3," is on the road to pulling in $1.2 billion this summer. Disney also credits its "Cars" movie/consumer product franchise in revamping attendance and interest in Disney California Adventure park.



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