New York -- Cox Communications Inc. president and CEO Jim Robbins threw down the gauntlet again for tiered sports programming at an industry conference here Tuesday, but top executives at the objects of his greatest ire said his argument is all wet.
Speaking at the Goldman Sachs Communacopia conference here, Robbins complained that ESPN and Fox Sports Net account for only 8% of viewers but make up 32% of the MSO’s total programming costs.
“We’re not going to be able to swallow these types of increases,” Robbins said, adding that in addition to ESPN’s 20% rate hike, FSN is asking for a 35% rate increase.
But News Corp. president and chief operating officer Peter Chernin, who took the podium immediately after Robbins, took exception with the Cox CEO’s data.
“That 35% rate increase he’s talking about is just not true,” Chernin said. “We’re in the early stages of negotiations for renewals. The 35% relates to just the market of Phoenix.”
Chernin explained that the Phoenix rate increase is so high because FSN just acquired the rights to the National Basketball Association’s Phoenix Suns from Qwest Communications International Inc.
He added that FSN is charging Cox less than Qwest did.
“It’s a 35% increase from Fox, but it’s actually a price decrease for Cox,” he added.
Chernin dismissed the notion of tiering sports programming, adding that it makes no economic sense. “Tiering is a non-starter,” he said.
The Walt Disney Co. president and COO Robert Iger, also speaking at the Goldman Sachs conference, said that while there is normally tension during negotiations with MSOs, cable operators forget the value that ESPN brings, including driving local advertising revenue.
“I don’t think that was the focus of Jim Robbins’ presentation,” Iger said.
Cox spokeswoman Laura Oberhelman said the proposed Phoenix rate increase was more like 50%. The average increase across all of its markets is about 35%, she added.
Later, Robbins said he expected “a good tussle” with programmers over the tiering issue, adding that Cox could drop networks.
Robbins said he did not wish to bring the fight to Washington regulators, and he would rather the parties work it out among themselves.
However, he added, Washington should have information from all sides.
“If we go dark, we want to inform them why we’re going dark,” Robbins said.