ESPN's John Skipper on Sports Rights, Layoffs and Keith Olbermann: 'We Don't Have a Policy Here That You Can Never Come Back' (Q&A)
This story first appeared in the July 19 issue of The Hollywood Reporter magazine.
It would not be an exaggeration to say that John Skipper presides over the most valuable media content company in the world. The most profitable of The Walt Disney Co.'s brands, ESPN is valued at $40 billion, nearly half of the entirety of its parent company. ESPN and ESPN2 are in more than 100 million U.S. homes, and ESPN commands the richest subscriber fees in all of cable -- at more than $5 a subscriber a month, contributing more than $6 billion annually -- while ad revenue at ESPN exceeds $3 billion.
Not bad for the son of a mailman from Lexington, N.C., who arrived in New York City nearly 40 years ago with a dream of becoming Maxwell Perkins, the famous literary editor to Ernest Hemingway, F. Scott Fitzgerald and Thomas Wolfe. "I actually thought I wanted to be Thomas Wolfe, but I didn't have the talent," admits Skipper. "So I thought I could edit Thomas Wolfe."
His career in publishing began during the 1970s, soon after finishing a master's degree in literature at Columbia, when he landed a job as a secretary at Rolling Stone. His entrée to ESPN came through magazines; during the mid-'90s, he was senior vp at Disney's publishing group when former ESPN chairman Steve Bornstein decided he wanted to start a magazine. Then-Disney CEO Michael Eisner said, "Well, we got a magazine guy," recalls Skipper, 57, a married father of two grown sons who retains his North Carolina drawl. ESPN The Magazine was a quick success and now has a circulation of 2.1 million (and a total readership of 14 million).
Money follows eyeballs, and in a time-shifted age of diminishing returns, sports programming only has increased in value. "Live sports are the most powerful programming in the universe right now," says Skipper. And ESPN has more sports rights than any other network -- though competitors are mounting challenges, including News Corp.'s Fox Sports 1, set to launch Aug. 17 in more than 90 million homes. The incumbent is not taking the newcomers lightly: a network dedicated to the SEC will launch in August 2014; it is in the middle of negotiations with the U.S. Golf Association and certainly would like to poach the U.S. Open from NBC; and it is building a 193,000-square-foot set at its Bristol, Conn., headquarters for its SportsCenter franchise.
Skipper assumed the ESPN presidency in January 2012 from longtime chief George Bodenheimer, and he shares the co-chairmanship of Disney Media Networks with Anne Sweeney. He splits his time between New York, Los Angeles and Bristol (and lives in Connecticut). And despite being in his current ESPN job for more than a year, he moved into Bodenheimer's large corner office on the 10th floor of ABC's Upper West Side headquarters only in early June. Tall, thin and impeccably neat, Skipper abhors clutter. One of the only pictures on the wall is of Michael Jordan's winning jump shot against Georgetown during the 1982 NCAA Championship game. Skipper admits that the picture was borrowed from a conference room for THR's photo shoot. "I went to North Carolina. That's why they thought it might look natural," he laughs. "I'm not a memento guy."
The Hollywood Reporter: How worried are you about Fox Sports 1?
John Skipper: We've had the great benefit of being able to be in the 24/7 cable sports television business for 30-plus years before other folks decided it was a good idea, so we are fortunate in having had that head start. We're cognizant, and we're respectful. We'll compete for eyeballs; we'll compete for ad dollars; we'll compete for sports rights. Fox is not just going to start a new 24/7 cable network; they are also trying to think about radio, about the Internet. But the idea that there is some sort of sudden horse race is a little silly. To be fair to Fox, they have said that out loud: "We know we're not going to be ESPN in two or three weeks."
THR: Would you be more worried if Fox Sports 1 were able to air NFL games?
Skipper: I don't think it would change things dramatically. If the NFL were to sell a package, it'd be selling somewhere between eight to 13 games. Those matter because they're NFL games, but if you look at our portfolio, it's very deep.
THR: Where's the ceiling on sports rights?
Skipper: Ultimately it's a free market, and sports rights end up being sold and valued for what they're worth. They're worth one dollar more than what somebody else will pay for them. Things that are unique and rare will cost a lot of money. Houses in East Hampton and Malibu will cost a lot of money because there just aren't that many of them. The value of sports has appreciated because it's the only thing that people have to watch live.
THR: What rights package do you not have that you want?
Skipper: I regret not being able to get hockey back. We made a strong bid for it last time [in 2011]. But the NHL felt well served by NBC. So that's kind of something you have to respect, that they wanted to stay with the incumbents. And of course, it was very difficult for me to lose World Cup soccer [which will go to Fox in 2018]. It's not even a question of who you lose it to. I mean, one thing we've been fortunate in is that while we've aggregated this huge portfolio of rights, the rest of what we don't have has tended to get spread around. When we lost the World Cup, it went to Fox. Hockey is at NBC. CBS and Turner kept the NCAA men's basketball tournament. That's another one that I regret, of course. Basketball is a sport I played as a kid. I grew up in North Carolina [and went to the University of North Carolina as an undergrad], so bringing the men's tournament here would have been great. But I'm generally pretty proud of what we've been able to assemble -- but we weren't able to get the men's basketball tournament, the World Cup, the Olympics, hockey.
THR: Speaking of World Cup soccer, I hear you're a fan of the U.K. Premier League's Tottenham Hotspur. How did that happen?
Skipper: I was going back and forth to London while working on Soccernet [the online world soccer site that ESPN acquired in 1999], and the guys in the office would take me to games. And I thought I had to pick a team. And the Hotspur appealed to my interest in literature. Hotspur was a character in Henry IV.