Robbins to Other MSOs: You’re Welcome2/20/2004 9:26 AM Eastern
Cable operators that are bound to benefit from the long-term carriage deal recently struck by Cox Communications Inc. and ESPN take heed: Cox CEO Jim Robbins would like to hear from you.
The deal -- in which Cox agreed to carry six ESPN networks in return for a nine-year deal with an average annual rate increase of 7% (in contrast to the 20% annual increases ESPN had pushed previously) -- is widely expected to serve as the benchmark for the rest of the cable industry.
"I hope there are a few thank-you notes coming to Atlanta," Robbins said in an interview.
And while the deal is perceived to be a major victory for Cox, Robbins said the fight against high sports-programming increases is far from over.
"This is good news for our customers. Is it Nirvana? No," he added. "I think the sports-programming paradigm is still broken. This is a significant move in the right direction, but it is by no means perfect. We will keep trying to make sure that every aspect of our involvement with the sports business becomes more and more rational."
This is the second favorable sports-programming deal Cox has landed in the past three months -- it reached a six-year deal with Fox Sports Net in December for an average annual rate increase of between 7%-9% (Fox Sports had originally proposed a 35% increase for 2004 and a 13% increase over five years).
Still, Robbins believes there is room for improvement.
"I don’t understand why sports need to be any different than any other aspect of the economy," he said. "We all operate on the basis of inflation. We who are in the food chain have let it get out of hand. So now we have to do our part to get it back in the box."
Robbins had taken a vocal stance against ESPN’s earlier 20% rate increases, lashing out at the sports network at an industry conference in September and insinuating that the network could go dark on the MSO’s systems if it didn’t get relief. The result was an often-heated public battle that Robbins was left to essentially fight alone.
While other MSO executives privately encouraged Robbins in the battle, he said he was disappointed that no other large MSOs joined the fray.
"I was very disappointed. Very disappointed," he said of the lack of public support he received from other MSOs. "I got a lot of private support -- ‘Right on, Robbins, keep going, you’re doing great.’ When I said, ‘Where are you in the foxhole?’ [They said] ‘I’m back at headquarters.’ It is what it is."
Robbins said his team and ESPN’s team went into "lockdown" mode Feb. 3 -- at that point, ESPN was proposing a 15% rate increase with a minimal decrease over time -- intent on getting a deal hammered out by Feb. 12, the day Cox would release its fourth-quarter financial results and the first day of a three-day The Walt Disney Co. investor meeting in Orlando, Fla.
"This is an agreement I had with [ESPN president] George Bodenheimer. We were going to lock everybody up, we were going to slug it out and if we got something done, great," Robbins said. "If we didn’t, that was it, we were going to go to war."
Robbins said the timing of the agreement had little to do with Comcast’s unsolicited bid for ESPN parent Disney. But it did manage to delay the announcement of the deal.
"We were essentially there, with the exception of papering the agreement," Robbins said. "Because of the hostile [bid], that took a little more time."
Robbins said ESPN executives were as surprised as he was about the Comcast bid.
"When the Comcast bid got announced, the ESPN guys were sitting in here," he added. "They were absolutely thunderstruck by it. We were feeding them information about what was going on."