George Bodenheimer climbed through the ranks of marketing, sales and affiliate relations before becoming president of ESPN in the U.S. in November 1998. Four months later, he was named president of the total sports network and its myriad holdings, both domestically and internationally — a multimedia powerhouse that is a top profit producer for The Walt Disney Co. When it adds National Basketball Association games next fall, ESPN will become the first television network to carry game coverage of all four major professional sports leagues. ESPN also often finds itself at the center of industry controversy, owing to its high monthly subscriber fees. Last week, in a telephone interview with Multichannel News news editor Mike Reynolds, Bodenheimer discussed the wide world of sports business.
MCN: Will you be up early in the morning the next few weeks to watch the World Cup?
I will. I get up early. I've been to the World Cup twice; it's really an exciting event. It obviously has appeal to soccer fans, but depending on how the U.S. and a couple of other teams do, it has a chance to grab some marginal fans, too.
MCN: You have the World Cup and Major League Soccer rights through a partnership deal. Do you have a lot of other such deals?
We have programming deals of all sizes and shapes. What mostly gets the headlines are the big straight cash deals with the big, major leagues. If you peel back the onion a bit, you'll see there are other programming deals like the partnership arrangement we have with the Anschutz Group.
MCN: Where do you go with different owned-and-operated franchises?
We're rolling out the X Games Global Championship in spring 2003 [a team competition that combines winter and summer sports]. X Games is a global franchise. This is the next step in its growth; it's a monster franchise for us.
MCN: Are there any other owned-and-operated properties on the horizon? You have one with timber sports…
You're referencing the Great Outdoor Games. That's only a piece of ESPN Outdoors, which also includes quite a bit of TV programming. Last year, we bought B.A.S.S., a bass-fishing company with over 600,000 members. We're really making ESPN Outdoors a franchise for us.
MCN: Is there a network in the offing?
Possibly. We're looking at some alternatives. We have over 1,000 hours on ESPN2 now. It would be nice. I'm not sure it's necessary.
MCN: Getting away from the four major pro leagues and college hoops and football, what other sports are real ratings and advertising winners for ESPN?
There are a number of them. I would cite the [National Collegiate Athletic Association] contract we did last year that gives us rights to 15 national championships.
MCN: Like the women's softball and men's lacrosse we saw Memorial Day weekend…
That's great programming. There is a lot of growth and ratings potential with the NCAA championships. Of course, SportsCenter
continues to be rock solid for us. As the competition has waned, it really is established as the leader in sports news in the United States.
MCN: How is the ad market?
I'm pretty optimistic as we go into the market that we will do well in the upfront, as it compares to last year. I think there will be some strength, and I think the NBA will be a strong property out of the box for us.
MCN: Most of the national [NBA] games will be on cable. Won't there be too many avails?
It's obviously solid product. Turner and NBC were up this year in the latter parts of the playoffs. We think that will carry through. We work well with the league office in working with sponsors. With the combination of those factors, I'm not concerned.
MCN: Why do you guys always stay atop the list in local sales?
Thanks for recognizing it. If you look at the length of time we've maintained that position and the gap, it's a pretty impressive story.
Three reasons: First, the ESPN brand is strong and getting stronger. No. 2: Demographics. Reaching young, affluent males is a tough assignment for marketers, and we do it at the top of the class. And No. 3, I think we work harder with our affiliates on local ad sales than anyone else in the business in terms of the number, scope and quality of promotions.
MCN: What do you make of the carriage dispute between Cablevision Systems Corp. and Yankees Entertainment & Sports Network?
(Cablevision has refused basic carriage for YES, a fledgling regional sports network with 130 exclusive New York Yankees games, citing high per-subscriber carriage fees; YES refuses to sell the network as a pay service.)
It's a difficult situation, certainly, and I'd prefer not to take any sides. I will say I would prefer to see it solved in the boardroom, rather than in the local newspapers.
MCN: If Cablevision makes it through without losing too many subs, doesn't that strengthen the à la carte argument?
I don't think the outcome of this will be pertinent to that discussion. In our opinion, à la carte is not a business model that works for MSOs, advertisers or consumers.
MCN: ESPN made a play for a regional-sports network a few years back. Would you go there again?
We're heavily involved in the regional business. At the [National Show], we announced a sports syndication sales group that supplies programming to regionals. We've always been interested in the regional business; we're interested in a way of doing it profitably.
In the short- to mid-term, I see program supply, rather than network operations, as where we'll find a very solid niche. We have the largest library of sports programming in the world, we have a tremendous amount of programming under contract and we produce an awful lot of telecasts. So we have product for sale and we're making good use of that.
MCN: At the National Show, there was a panel discussion where it was said that sports rights may have peaked. Have they?
First off, we certainly hope so. But as [The Walt Disney Co. president] Bob Iger pointed out on that panel, often times you have to compete heavily for sports rights. Having said that, we are seeing some declines, both domestically and internationally. I think there is some room for optimism.
MCN: How many calls do you get about the annual 20-percent increases that have become a rite of spring and summer?
Having cut my teeth on the affiliate side of the business at ESPN, I maintain extensive contacts in the industry and sit on the NCTA [National Cable & Telecommunications Association] board. I talk to affiliates all the time. It's not a matter of annually when the contracted adjustments go in place.
MCN: ESPN is part of cable's fabric, but it's high-priced. Is there a love-hate relationship with ESPN among the cable community?
Not at all. I characterize it as healthy respect. Neither side can do without the other. We both are in very successful businesses and we support each other's business. That's what I call a healthy relationship.
MCN: The contracts largely go through 2005. Can operators expect 20 percent increases over the balance of the contract?
We make decisions annually. I really wouldn't be in a position to discuss specifics beyond that. I will also say that our contracts are staggered, so we're constantly in discussions with our affiliates.
MCN: Your deals with the National Football League, Major League Baseball and the National Hockey League all conclude with the 2005 season. Is 2006 a big year?
It's hard to look ahead that far. Just like affiliates, we're always in discussions with our league partners about opportunities to expand. I don't look at 2006 as any kind of bellwether year.
MCN: Your favorite sport? What do you watch on ESPN?
My favorite sport is to get in a round of golf with the family. I watch virtually all sports we produce — all 65 of them.
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