Cable Operators

ESPN Exec on Deals: ‘It’s Good Pressure’

5/31/2011 8:01 AM Eastern

Even though it makes negotiating carriage
deals a lot trickier, David Preschlack says that fast evolving
technology is ESPN’s friend.

“For as far back as I can remember, we’ve always looked
at what’s next,” Preschlack, who is executive vice president,
affiliate sales and marketing, Disney & ESPN Networks
Group, said. “It is really in our DNA.”

Hammering out contract renewals has become a much
more complex process not only for gatekeepers from
MSOs, satellite-TV providers and telcos, but for network
affiliate-sales executives such as Preschlack, who handles
ESPN’s empire of sports channels. They all must take advances
in technology into account in their deals.

PLANNING AHEAD

Preschlack claims he doesn’t mind the stress of trying to
craft contracts that will cover nascent technology that may
be on the horizon, but isn’t even quite there yet.

“Is there pressure?” he asked. “Yeah, absolutely. But it’s
good pressure. It forces us to continue to get better. We’ve
been operating in that environment for quite some time.”

Sports behemoth ESPN was early in the game with its
ESPN 360 broadband site, now called ESPN3.com; with
HDTV and 3D networks; with its authenticated version of
ESPN; and with its WatchESPN app for iPhones and iPads,
which provides access to live streaming feeds from ESPN,
ESPN2, ESPN3.com and ESPNU.

Those have all become potential deal points and bargaining
chips — and possible areas of contention — in
talks between programmers and distributors. It’s something
that Preschlack will likely face soon.

He declined to comment on which affiliation deals are
coming up for renewal for ESPN, which is owned by The
Walt Disney Co. But on Disney’s first-quarter conference
call, CEO Bob Iger said, “ESPN has a large number of distribution
negotiations to engage in.”

Iger didn’t specify which deals he was referring to, but
both Cox Communications and Charter Communications
did major long-term deals with ESPN in 2004 that
may expire in 2014.

In April, right before The Masters golf tournament, ESPN
debuted its app for iPads and iPhones.

“The response has been
pretty incredible,” Preschlack
said. “These devices continue
to gain popularity … We had
well over 1 million downloads
of WatchESPN since we launched
back in April. People have embraced
it right out of the gate, and
the real value of this is portability.”

In terms of negot iat ions,
ESPN has to “prioritize every
day, because the landscape is
always changing,” according to
Preschlack.

DEALING IN 3D

ESPN 3D is definitely on that list.
ESPN has struck agreements
with Comcast, Time Warner Cable, DirecTV, Verizon Communications
and AT&T for ESPN 3D, providing access to
some 65 million homes. The channel, which launched last
June the opening of the FIFA World Cup soccer tournament
in South Africa, also has international distribution.

“I’m paying attention to the 3D marketplace like everybody
else, in terms of some of the challenges, which I view
as opportunities,” he said. “Betting against 3D is betting
against technology. The user experience is just going to
get better.

“I saw pure 3D on a smart phone from a colleague who
runs a distribution marketplace in South Korea. Incredible.
No glasses, by the way.”

September