ESPN defends rate hike

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ESPN defended itself against MSO criticism of its latest annual license-fee increase
with a fact sheet released Tuesday that talked up the benefits that affiliates
derive from ESPN and its various sibling networks.

ESPN and ABC Sports president George Bodenheimer told Tuesday's Senate
Commerce Committee hearing on cable rates, "ESPN is a major contributor to
cable's success."

According to the fact sheet, the various ESPN networks "will generate almost
three-quarters of a billion dollars" in local ad revenues this year for
operators.

Operators pay about $11 per month, per subscriber for basic-cable programming,
ESPN reported, of which more than $4 per month, per subscriber is recouped by
local ad sales.

For ESPN alone, Bodenheimer said, local ad sales "offset a significant
portion of the wholesale cost" to operators via the affiliate fees. "As a
result, the net wholesale cost for ESPN is about $1 per sub, per
month," he added.

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