Skipper No Longer on Deck
When ESPN programming chief Mark Shapiro left last October to eventually take over as CEO of Six Flags, the network looked to one of its own, John Skipper, to fill the vacancy. But with a diverse background in the magazine and Internet world (he has run both for ESPN), Skipper was given the role of executive VP of content for all of ESPN and ABC Sports, overseeing content for not just the television network but all platforms for one of the biggest brands in media. Since taking on his new role, Skipper has closed deals to land a long-desired reconciliation with NASCAR and to hang onto the World Cup soccer tournament, and he chose not to re-up with the PGA Tour (which was snapped up by Comcast for The Golf Channel). An ESPN-branded cellphone is just one way his company is looking to grow through new-media opportunities. Now almost four months into the job, Skipper tells B&C’s Ben Grossman about his next acquisition target, his plan to grow revenues and what’s ahead for the network.
How does your vision differ from that of Mark Shapiro?
I want to make a bet on a couple different sports. For instance, I think soccer is going to work, and Mark didn’t believe in soccer. That’s just a contrast in personal bets. With original entertainment, it is more personal. I want to look at things a little more demographically than he did. I think we want to make sure we are doing things for a young audience.
So are there specific types of programming you want to acquire?
We are looking at animation. We want to target young guys. We are just exploring it, and we just met with some people who could bring us some. Target-wise, not subject wise, you look at Family Guy, Adult Swim, The Simpsons—that is a very good way for us to go to target young guys. Our goal is to have something in the next six months.
I think you’ll also see us do more documentaries. We are hoping to pick another one up from a film festival. We like the model of doing a limited theatrical release and then airing it. I’d like to give HBO a run for their money on documentaries.
What is the biggest challenge you face from a business perspective?
Escalating rights fees. There are lots of smart and well-heeled competitors: OLN is looking; Fox has said they need to increase their college-football portfolio. We do a lot of things, but we still aggregate our biggest audiences around events, and, for those, we have to buy rights. Clearly, [corporate] boards have been forced into being a little tougher; there is a higher level of scrutiny. We have to provide justification.
What are your latest thoughts on Comcast’s plans for OLN?
It’s Outdoor Life, that’s what we call it still. But we take them seriously, and we are wise to assume that their intention is to compete in the general-interest sports category.
Would you buy the proposed eight-game Thursday-Saturday NFL package just to keep it off of OLN?
It is not our intention to acquire rights for that purpose.
What’s the financial model for delivering content via new media?
We try to be very conservative, because this stuff is a lot more smoke of hype than fire of finance. We just have to include it and model it out. What do we do in a world where consumers can take the content from one device and move it to another? We have told people—the PGA Tour will tell you we told them this—we won’t do deals that are just television deals; we will only do deals that include a broad array of rights across platforms.
How much of your time is devoted to the new-media space?
Relative to the current operating income, it takes up a far disproportionate share. Particularly with the launch of [the ESPN-branded cellphone], I spend half my time on new media; we have people to think about TV full-time.
Is an ESPN cellphone getting too far from your core business?
It is maybe as complex or risky a venture as ESPN has ever had. On the other hand, it’s almost like manifest destiny: If this is going to become a third screen for people to get sports information, you have to do it. We’re going to do it two ways: by licensing content to all the carriers and by creating an immersive experience all under our brand with ESPN mobile.
How can ESPN continue to be a growth property for Disney?
We don’t get much money directly from consumers. Many of our affiliate deals are long term and are known. Advertising-wise, we are bullish. But where we can grow revenue is consumers. The phone is our first big venture to go get money directly from consumers.
We believe that, if we get a base of customers who pay us on a monthly basis a fairly large transaction, our licensing business will get a database and we will create more products and services that people pay us directly for. If we look at a five- to 10-year horizon, getting more money from consumers is how we add a third revenue stream and keep growing.
How is your college network, ESPNU, coming along?
I’m a competitive guy, so I’ll give you a little contrast with [College Sports Television, recently acquired by CBS]. After 10 months we are in [almost] 8 million homes; they are somewhere around 15 million, give or take. We say how many we are actually in. You’ll see us take a good run at making sure we keep up. We will announce some original programming for the network in the next 30-60 days.
Shapiro was known as something of a fiery negotiator. How will you be known as a negotiator?
I hope the NASCAR guys and the World Cup guys would tell you this, I am an easygoing guy. I am a straightforward negotiator. I like to call people and tell them what I have in mind, and I want to know what is important to them. We were very straightforward with the PGA Tour, World Cup and NASCAR. I don’t quite understand what a tough negotiator is. You can bluster and huff and puff and pound a table, but it doesn’t matter. It’s all about leverage.