ESPN, ABC Are Still Talking With NFL

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The Walt Disney Co. said it is in negotiations with the National Football League for rights to Sunday- and Monday-night games, but gave no indication that a deal would come anytime soon.

Those talks come a little more than a week after the NFL reached six-year deals for Sunday afternoon games valued at $8 billion with broadcasters CBS and Fox.

In a conference call with analysts discussing its fiscal fourth-quarter results, Disney president Bob Iger was reluctant to give details about the negotiations. But he said Disney did not negotiate with the NFL at the same time as CBS and Fox, because Iger wanted to see the outcome of those deals.

'WE’RE ENGAGED’

“One of the reasons that we waited was we needed to find out what kind of scheduling flexibility would be built in to the primetime packages,” Iger said. “Now that we know that, the prospects for scheduling flexibility are quite good, possibly for both Sunday and Monday night. We’re engaged with the NFL.”

The deals with Fox and CBS now allow for the prospects of switching better games to MNF late in the season. The NFL announces its primetime slates in April, often leaving the Disney-owned networks with less-than-favorable matchups.

Although ABC has broadcast Monday Night Football for 35 years and its ESPN sports network has carried Sunday night games exclusively since 1998, Disney isn’t expected to be alone in its quest for the contests.

ABC holds exclusive negotiating rights until next October, but others likely interested in the primetime packages include NBC Universal and Turner Network Television.

One possible competitor that has taken itself out of the running is News Corp., which owns the Fox broadcast network and several cable channels.

At the Fox Entertainment Group annual shareholders meeting last Tuesday, News Corp. chairman Rupert Murdoch said he was uninterested in the Sunday/Monday night NFL package, but was intrigued by a Thursday/Saturday night slate of late-season games that may be available during the 2006 season.

“We’re unlikely to want Monday Night Football in its present form; it’s been going down in the ratings,” Murdoch said. “If they did that [offer a Thursday/Saturday package], it would almost certainly be [on a cable network], either a new one or an existing one. There will be quite a lot of interest in it from various people and we would be interested, too.”

Murdoch added that if Fox was able to capture the Thursday/Saturday games, it would go a long way toward making his desire to create a national sports network to rival ESPN a reality.

“Yes,” Murdoch said in response to a question if the NFL rights would allow him to launch a national sports network. “But then again, it would be difficult to do that.”

EARNINGS STRONG

While speculation about NFL rights will probably continue for the next year, Disney reported strong fourth-quarter earnings growth, fueled by continued gains at its cable and broadcast networks.

Earnings for the quarter were up 24% to $516 million (25 cents per share) on a revenue gain of 8% to $7.5 billion. For the full year, earnings growth was a solid 85% to $2.3 billion ($1.06 per share) on a 14% revenue gain to $30.8 billion.

While Disney had strong growth across all of its segments, the quarter and the year were primarily driven by its Media Networks segment, which includes cable channels and ABC.

For the quarter, Media Networks revenue was up 10% to $2.9 billion and operating income rose 50% to $448 million. For the full year, revenue was up 8% and operating income increased 79%.

Leading the segment were strong advertising and affiliate revenue at cable channels ESPN and ABC Family. The ABC broadcast network, long in the cellar among the four top broadcasters, also showed strong gains in the quarter, as new hit shows like Lost and Desperate Housewives improved ratings and advertising revenue.

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