Disney's Iger: 'There's Always Tension'

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Reporters from Multichannel News and a few other publications had a chance to corner The Walt Disney Co. president Robert Iger at ABC Cable's National Show booth last week. An edited transcript of the exchange follows:

Q: Did you seriously think you'd get the Olympics with that bid [an offer to share revenue with the International Olympic Committee]?

Bob Iger: The strategy behind the Olympic bid was basically to be there because we wanted to show respect for the IOC, and secondly, we wanted to show respect for the events themselves, even though we thought it was a long shot, that maybe the other bidders wouldn't be there at a level that the IOC would be happy; that they would view our approach as being different and interesting.

Q: What's your reaction to all of the heat between you all and cable operators over ESPN?

Iger: There's always been tension, based mostly on price. But we obviously are aware that there has been more tension lately on the ESPN pricing and we take it seriously, meaning we're not dismissive of it, but we prefer to maintain a dialogue on the subject directly with the cable operators and not in public.

We've had long-term relationships with them, have been in many trying and difficult and complicated negotiations, and in a way this is a continuation of that. I believe that in the end all of the problems will be solved. All of the differences in effect will be put aside, because we both know this is a good business for both sides.

Q: Are you concerned that ESPN's annual 20% rate hike hurts your ability to launch new networks?

Iger: All of our networks speak for themselves, in terms of what they offer viewers and cable operators, and we've created a lot of value, and we'll continue to, and I'm not concerned about that. One of the things that's unfortunate is that there's been way too much focus on pricing, and not enough focus on value proposition for the consumer.

I think expanded basic cable at a little bit more than $1 a day, in effect, is an unbelievably attractive proposition for the consumer.

Q: Are you concerned about Sen. John McCain's interest in cable rates, and where do you stand on his ideas on tiering and à la carte offers?

Iger: I think regulating cable pricing and in particular regulating cable in an à la carte or tiering direction would be a big mistake for the business. The consumer proposition that would result from forced à la carte offerings would be much more negative, more costly and less attractive to the consumers than the proposition that the consumer is offered today.

So in the end, am I concerned? Yes, but I think that the government and business will be wise about this, and not do something that ultimately prices the product to a level that it's not affordable for many consumers that are enjoying it today.

Q: You can squeeze cable operators more than you can squeeze advertisers. The advertisers have more options, and the operators don't have any options.

Iger: I don't know want you mean by that.

Q: Meaning you're looking for the cable operators to pay for all of ESPN's expensive programming.

Iger: In the end, the decision in terms of what programming a cable provider carries is their decision, not ours. This isn't a gun-to-your-head relationship at all.

We create great programming, they distribute it well, and I believe price it fairly to consumers, and that has been a good business for both sides. I believe that should and will continue.

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