Comcast’s Mega-Dealmakers

When Comcast inked its 10-year carriage deal with The Walt Disney Co., it
was touted as the template for programming mega-deals to come. Encompassing
25 Disney-owned cable and broadcast services (including the ESPN
and Disney Channel network families, as well as 10 ABC owned-and-operated
TV stations), the deal has been praised for its size, scope and vision — it
involves more than 70 services and accelerates the TV Everywhere initiative
for the entire cable industry.

While the Comcast negotiating team was led by executive vice president of content acquisition
Greg Rigdon — with an assist from executive vice president of satellite services Alan Dannenbaum
and senior vice president content acquisition Mike Schrieber — its core was made up of four
dynamic women who, for more than three months, spent 20-hour days locked in conference rooms
at Comcast’s Philadelphia headquarters with Disney executives.

Those four women — Comcast senior vice president of content acquisition Jennifer Gaiski,
Comcast Cable vice president of video services Maggie McLean Suniewick; Comcast vice
president, deputy general counsel and chief counsel, content acquisition Sarah Gitchell; and
Comcast senior counsel, content acquisition Angela Montag Jones — sat down with Multichannel
editor in chief Mark Robichaux and senior finance editor Mike Farrell in late March
to discuss some general aspects of the deal, as well as the nation’s largest cable operator’s
approach to content acquisition. An edited transcript follows.

MCN: Was this the first deal that all of you
did together?

Maggie McLean Suniewick: We have all
worked on deals together before. I would say
that this is the first one that was completely
integrated. All pieces were negotiated together,
so even if we weren’t all in the room
at the same time, we had every floor and every
room going.

Jennifer Gaiski: Really, every piece of the
deal was like an engine. It was just all going
at one time. And we would trade off and people
had to move [between] rooms because
different rooms were talking about different
topics. If we’d have to take a break so we
could all group [together] within our groups,
eat a meal every once in a while and catch
up with each other, we would do that as well.

Suniewick: A lot of times in the past, we
had an online deal separate from the main
linear deal or sort of disconnected. This deal
is all one deal.

MCN: So, how did this begin? Did [Comcast
chairman and CEO] Brian Roberts call
[Disney chairman and CEO] Bob Iger and
say, “Hey, we’ve got to do a deal?”

Gaiski: Bob calls Brian. (Laughter.)

MCN: You’ve got all these different little
contracts; some are still in play, some are
coming due at various dates in the future.
You’ve put two teams together; now what

In years past, if one network was up,
you renewed that one network deal. But over
time, with industry consolidation and just
time efficiency and how large the task is of getting
these deals done, they now get grouped
together. Now, when we’re doing deals, you
could be talking 20 services at once.

The interesting thing about this deal is
that they had lawyers and negotiators from
ABC, from [movie-distribution unit] Buena
Vista, from the Disney channels and from
the ESPN channels. There were periods of
time where we were feeding 30 people breakfast,
lunch and dinner every day.

MCN: When did you start?

Suniewick: Gosh, [Iger and Roberts] had
been talking for months leading up to it. But
I would say it really kicked into gear in late

Angela Montag Jones: In earnest. You
had teams of people working through all the
details, breaking up into [groups] — you go
deal with authentication, you go deal with
linear rights. That was in October.

Gaiski: Leading up to that, we had had two really
big meetings with [Disney and ESPN Networks
Group executive vice president of affiliate
sales and marketing] David Preschlack and
his group. Then we had a hiatus where we all
went back to think about and talk to our management
about how we were going to work this
out. It was probably mid-October-ish that they
brought the buses in and we began to really
spend a lot of time together.

Suniewick: You have to start with the concept.
Bob and Brian can say, “Here’s the concept,” and there is a lot of nuance to that, and
then you get into the weeds.

MCN: What was the concept?

Suniewick: I think the concept was, which
we all agreed on —

MCN: Let’s make a deal? (Laughter.)

Let’s make a deal and let’s give
our customers access to this content on as
many platforms as we possibly can. Not that
it was different than deals that we had done
in the past, but we did come to the table with
a common understanding of what we were
trying to get done. The only way to do that
was to open up all the deals.

MCN: So what were the top issues that
had to get worked through? First, it’s a
concept — what are the other big issues?

Jones: I guess ironing out the concepts, the
business rules around how this product was
going to work and be serviced on whatever
platform. That was really the lion’s share of
the work that we had to do, figuring out advertising
rules around the content and the
branding and the security.

We were lucky in that both companies had
a unified vision that we wanted this to be
really a cross-platform product; we wanted
this to be accessible anywhere and to provide
for the flexibility that we needed in a 10-
year deal, because who knows what the next
big technology is going to be?

MCN: Can you give us an example of that?

Jones: I think the perfect example is just
how we structured it. We didn’t have so
much of a fight about trying to define what
the devices were, trying to really define what
the platforms were. We really stuck to, “Here
are the rules around security; here are the
rules around advertising.” Whatever method
it’s delivered by, as long as we follow these
rules, we can go to whatever platform.

Gaiski: Other deals we would have negotiations,
like, “OK, great, it’ll be on the iPad, it’ll
be on the tablet, it’ll be on the smartphone.
What’s the definition of a smartphone?
what’s the definition of a tablet?” For a 10-
year deal, you can’t really define the future,
so you have to be more dynamic.

Sarah Gitchell: I think a lot of people are
probably nervous about dealing with the
unknown. We had to build flexibility into
the document and what we agreed to before,
whatever comes up in the future.

Jones: There was a whole conversation
about the definition of the Internet.

Suniewick: That’s the next level down.
That’s another thing that
you have to set early on is
what is the content that
we’re talking about, what
content is going to be distributed
— how many
shows, how many hours.
That’s a big one.

MCN: How was the tangle
of rights negotiated?

Suniewick: They came
from the table having already
cleared a lot of the
rights that they needed to
allow us to do this. Sometimes
when you sit down to
negotiate, they say, “We’d
love to give it to you, but we
don’t have the rights.”

MCN: What do you do in
that situation?

Gaiski: We have to recalibrate
the deal — very often.

MCN: Were there any
specific examples of issues
or problems or hurdles that
came up with the rights
or with the number of hours or things like

Suniewick: It’s always a balance. We would
ask for something, they would have to go talk
to their ops people. There was a lot of walking
in the hallway and calling people and
saying, “Are we going to be able to meet this
requirement?” It was less conceptual issues
and more, “How do we actually effectuate
this contract?”

MCN: How do the programmers get paid for
this? Is it a separate rate structure that you
have for this kind of content, or is it baked
into the affiliate fee that you’re paying? Or
does someone just write a big check?

Gitchell: I think it’s a mix, in all honesty.
It’s a mix in this deal and it’s a mix in all the
other deals.

MCN: So programmers in general are being
remunerated in many different ways?

Jones: Th e programmers generally are. I don’t
think that the different groups within the Disney
Co. all have the same mindset about that.

MCN: I’m sure ESPN has got a different
view of this.

Gaiski: Well, that was one of the most interesting
parts of this negotiation. That’s not a
bad thing; it actually made
the negotiation so incredibly
interesting, because
how do you make it all work
for everybody involved?
Buena Vista was here, a
movie studio was here and
a broadcaster was here.
They couldn’t be more different.

Jones: And they’re all at
various stages in the development
of what the TV
Everywhere product is. So
ESPN is going to be way
more advanced than the
[other] Disney properties,
for instance. It was interesting
trying to funnel those all
into one.

MCN: How did Disney’s
MFN [most-favored nation]
agreements play into this?

Suniewick: They had lawyers
from every group who
were well aware of their
MFNs. And a lot of issues
that come down to negotiating
might be, “OK, we’ve
agreed on concept, we’ve agreed on business
terms, but how do we draft this in such
a way that it doesn’t trigger 5,000 MFNs?”

MCN: What were some of the things that
held you up?

Suniewick: A lot of times, as Jen said, you’re
looking at 70-page documents and you read
them the next morning and you say, “Oh, we
really need to go back and talk about something
like the definition of the Internet.”

How do you define what the Internet is in a
way that will be relevant 10 years from now?
Then, it’s just the reality of having 30 people
reading it. Everybody has their own opinion
about what the definition of the Internet is.

Jones: Then, you get into a discussion with
the security people and they have a different
idea of what they think the Internet should
be and how it should be described. Then you
talk with the people who are concerned about
data, and they have a different idea, and you
have to bring it all together. So you may think
you came up with a definition, but when it
runs the gauntlet with all these different people
looking at it from their perspectives, you
come back and sit down and talk again about
what the definition of the Internet is.

Suniewick: These little things pop up and
the next thing you know, it’s 2 o’clock in the morning and you’re still talking about
what the definition of the Internet is.

Gaiski: You keep coming back, because as
you learn more and talk more and as the
deal begins to take shape, things might
take a different form within the contract
that you have to go back and tweak or

MCN: Any examples?

Gitchell: I just remember having a big,
two-hour-long conversation about the
difference between interpreting your
rights or applying your rights. People
looking in on us would probably think,
“You guys are crazy.”

MCN: And at any point was this over
price? Was it ever that black and
white with price, or was it mostly

Jones: I think it was mostly around
the details. I think we were pretty good
about coming to agreement on the larger

Suniewick: But I will add in that it is
such a pleasure to work here because
eventually, there are a few things that
bubble up that nobody on the deal
team sitting in the conference rooms can
resolve. And it does take [Comcast Cable
president] Neil [Smit] or Brian to be able to
sit down and call in. They get things, and
they understand the business, and they get it
right away. So Greg can go into Neil and give
him two seconds of an explanation, and he
already has it.

Gaiski: And [they’re] totally available to us.
Brian and Neil were completely available to

Jones: One night, Brian was here ’til 2
o’clock in the morning.

Gaiski: He came and had cold quesadillas
with us.

It was “Mexican Fiesta Night.”
… Even though we had a small team, there
were people throughout the whole company
who were very engaged.

Gaiski: We were calling our CMC [Comcast
Media Center] folks out in Denver in the
middle of the night. Our one tax lawyer up at
Comcast corporate was fantastic. [He] made
himself available many times, at many very
strange hours.

MCN: Did you work through every weekend?

Gaiski: I think we had one or two weekends
off in three months.

Suniewick: We had off, but we had pulled
an all-nighter that Friday night and so we left
at 5 o’clock in the morning on Saturday. We
were completely delirious.

Gaiski: We had swimming lessons for my
child at 9 o’clock. So I went home, I slept for
one hour and then went to swimming lessons
at the YMCA. We saw my neighbor and
she was like, “You look like hell.” I’m like,
“Thanks.” (Laughter.)

MCN: Do you see this deal as a template
for other deals?

As far as acquiring those types of

MCN: Yes.

Gitchell: We are tweaking those 24/7 in every
deal we do.

MCN: But not in a singular, one-time deal.

Gaiski: I probably talk to 12 programmers in
a day and they are all asking a ton of questions
about Disney and not necessarily intimate
questions, more like, “How did you make it
work and how can I make that work for my
company?” Programmers really understand
what we’re trying to do for the customer and
the value is there for both sides of the equation.
And so as the opportunities arise, we
would love to take advantage of it more.

MCN: Isn’t the big driver for these longterm
deals so you can spread the cost out
over a greater period of time and ease the

Gaiski: I would say the advantage of having
a long-term deal is knowing you have
the rights — and not necessarily spreading
the cost — but having rate certainty for
that 10-year period.

Remember, most of our deals start with
the programmers coming into us with
their proposal. So they determine their
length of term, they determine their economic
apps before we even get involved.

MCN: So when your Viacom and News
Corp. or other deals come up, you probably
want to do the same, right?

Gaiski: Absolutely. We are open for business.

MCN: The way this is structured, does
every Disney network and TV station
deal come due on Dec. 31, 10 years
from now?

Gaiski: Yes.

MCN: Is that good or bad?

Suniewick: It’s so far away that everyone
figures it doesn’t matter.


Comcast’s 10-year carriage agreement with The Walt
Disney Co. encompasses 25 networks and about 70
services across multiple platforms. Here’s a look at
some of the on-demand components of the deal:

ABC On Demand, ABC’s fast-forward-disabled
On Demand service.

ABC Family On Demand, which features top-rated full episodes, refreshed
monthly, from such popular millennial favorites as The Secret Life of the
American Teenager
, Switched at Birth,” and Melissa & Joey.

Disney-branded On Demand offerings, including Disney Channel On
Demand, Disney Junior On Demand, and Disney XD On Demand.

Disney Channel’s subscription VOD service, which offers on demand
access to select episodes before they air, available to Xfi nity TV customers
who receive Disney Channel, for no additional fee.

Expanded on demand content from ESPN, including content from ESPN
Deportes and ESPN’s award-winning original content from ESPN Films.

Disney Family Movies, a subscription on-demand featuring a selection of
feature films and animated shorts from The Walt Disney Studios.

SOURCE: Comcast and Disney