Eisner: We Aren't the Problem

Walt Disney Co. chairman Michael Eisner claims programmers have become the scapegoats for rising cable rates.

During a press conference on Disney's purchase of Fox Family Channel last week, Eisner was asked about the deal's impact on retail rates to cable subscribers.

"We have no control over what a cable company charges their consumer," Eisner said. "And they are in quest of higher and higher margins. You'll have to ask them.

"They may blame us because that's an easy whipping horse to blame — you know, everybody has blamed programmers forever for everything that's wrong in the world," he added.

Eisner continued: "The fact of the matter is, I think the programmers do a pretty good job at a pretty economical basis. … Laying the pipe, the billing, their margins, their profits, their desire for acquisitions, may have more to do with the price that they're [cable operators] charging."

The remarks had some MSO officials bristling.

"I completely reject every word he said," said Matt Polka, president of the American Cable Association, which represents independent cable operators. "Michael Eisner's remarks clearly show that these programmers are not in touch with their customers, cable operators. If they're a whipping horse, then they deserve to be."

He noted that while just one of Disney's many cable networks, ESPN, raises its license fees 20 percent a year, cable operators are trying to stick to single-digit, cost-of-living increases for their subscribers.

Margins for smaller operators "are constantly shrinking," Polka said.

Charter Communications Inc. CEO Jerry Kent also begged to differ with Eisner.

"Let's just say, while I don't want to respond to Mr. Eisner's remarks directly, let me point out that our biggest cost in providing service to our customers is our programming costs," Kent said. "And to the extent that programmers are attempting to pass through double-digit cost increases, I take this as a serious threat to my customers. And we will take appropriate action to protect our customers."

Mediacom Communications Corp. senior vice president of programming and human resources Italia Commisso Weinand said of Eisner's remarks, "How can he say things like that?"

At one point in last week's press conference, Eisner said, "An additional nickel or something like that for a cable service in a $40 bill is not really the problem."

Kent asked, "Does that mean he's only going to raise it [Fox Family/ABC Family's license fee] a nickel, then?"