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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).

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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."

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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.

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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.

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THR: Soccer is huge internationally. And it's grown in popularity in the U.S. but is still an also-ran to football, baseball and basketball. How do you get Americans to care?

Skipper: With the World Cup, we did these campaigns: "One Game Changes Everything." We got U2 to do some music for us, which had that big anthem sound. And I think we convinced Americans that this is a spectacular quadrennial event that the rest of the world stops for, and if you don't pay attention, you're missing out on something. And in South Africa [for the 2010 World Cup], we took some tricks from the old Olympic playbook of Roone Arledge; the up-close-and-personal [segments] and giving people a sense of the environment. We'll do a fair amount of that again [for the 2014 World Cup] in Brazil.

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THR: How focused are you on the international markets?

Skipper: What's important to us right now is Latin America. We want to have an international component to our domestic programming. We have the World Cup rights to cricket in 2015. We have the European soccer championships in 2016. I have found -- and tennis may be the greatest manifestation of it -- Americans have become more international in taste. Remember the old axiom that you have to have American players for Americans to be interested? And in tennis, it's just not true anymore.

THR: ESPN poached Wimbledon from NBC, which had the final for 43 years. Is there a cable-vs.-broadcast divide when it comes to rights?

Skipper: We're going to put the college football championship on cable. Wimbledon is on cable. Next month we'll have the British Open on cable. It doesn't matter much anymore. I would acknowledge there's a small divide in ratings because there still are 10 million to 15 million households that don't get paid television. But they tend to be very light sports viewers. They tend to be rural; they tend to be lower income. Sports fans tend to get pay television. By the way, we had more viewers for the final of Wimbledon on cable than they had on broadcast.

THR: You have lost a lot of female anchors lately: Michelle Beadle, Charissa Thompson, Erin Andrews, Rachel Nichols. Is it harder to keep women because they don't seem to get the big jobs?

Skipper: In the last eight or 10 years, we've transformed how the network looks. If you could be transported back to 2003 or '04, you would not see many women on our network, and you wouldn't see the diversity of Hispanic talent and the number of African-Americans and Asian-Americans. In 2011, when there were 27 national female sportswriters, 19 of them worked for ESPN. So if you're starting a new network and you want to get women who are doing sports, we are where you'd come to poach.

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THR: There are notorious stories from back in the day. Is the culture more female-friendly now?

Skipper: The answer is a definitive yes. There is zero tolerance for harassment, for inappropriate remarks, for inappropriate pictures. We made it very clear. Four or five years ago, we had three or four difficult incidents, and we called all of our talent in and told them there are not three strikes, there's one. If you're caught harassing somebody or discriminating against somebody -- you want to make a homophobic joke, you want to make a sexist joke -- you put your job at risk immediately.

THR: Speaking of talent, in James Andrew Miller and Tom Shales' book about ESPN, it was said that Keith Olbermann didn't just burn bridges at ESPN, he "napalmed" them. Would you bring him back?

Skipper: I wasn't here when Keith was here, but he is very talented. So I had dinner with Keith -- it was delightful and fun. And I would not have had dinner with him if we didn't sit around and think about whether there was a reason to bring Keith back. I haven't met with him again, but we don't have a policy here that you can never come back.

THR: ESPN's Outside the Lines has broken a lot of news about the NFL's concussion crisis. Is that a fine line to walk considering your rich NFL deal?

Skipper: Look, we have spent a lot of time thinking about that, and internally it's actually quite clear: We have a programming group, whose job it is to acquire rights, to work with the leagues, to be their partners in presenting their games on our air -- and then we have the news and information group, whose job it is to do enterprise journalism. And the programming guys cannot interfere with the journalism. The single thing that irritates me most is the assumption that we have some sort of unmanageable conflict. We have a conflict, as your question relayed, but it's manageable as long as we stick to those rules. We employ hundreds of writers and journalists, and I don't think you'll find a single instance of somebody saying they were asked to pull off of a story.

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THR: Grantland editor Bill Simmons has a unique position: He's part of ESPN, but he criticizes the company on Twitter and gets suspended.

Skipper: Bill is a unique talent. There has never been anybody writing about sports who has had more readers than Bill Simmons. Bill creates a lot of great content for us. He is passionate about what he does, and every now and then that passion explodes onto his Twitter account, and we have to figure out how to deal with it. I'm personally very fond of Bill. He's done a lot for our company. It has been about 99.8 percent great.

THR: Sen. John McCain has pushed an a la carte bill to free consumers from bundled cable, which he thinks is inflated by the high cost distributors pay for sports networks like ESPN.

Skipper: We don't set the prices for consumers -- the distributors do. And the whole premise of a la carte is just flawed. You will not get more for less; you're going to end up getting less choice, less opportunity to see different points of view. Many channels would go out of business in an a la carte world. There also is this suggestion, which he and others love to make, that people who get ESPN don't watch it -- 88 percent of all households that have ESPN watch it.

THR: ESPN recently laid off about 400 people, 5 percent of its U.S. workforce. Will there be more cuts?

Skipper: We are at the end of it. We had not for a long time looked at our organization with an eye toward making sure that our resources, our people, our money was spent against things that make a difference. The world's a little different. There's really 10 distribution deals to do now, and they're long-term, so we consolidated some of our affiliate sales functions. We closed the Denver office; we quit doing 3D. So we eliminated a bunch of jobs. But we are adding people for the SEC Network; we're adding people in digital; we will add people for the new SportsCenter. We are continuing to put more resources in L.A. We're not retrenching.

THR: What's your relationship like with Disney CEO Robert Iger?

Skipper: It's good, as far as I know. (Laughs.) I have this thing I used to say at home and in the office: If somebody is calling, unless it's somebody who can fire me, I'll call them back later. So when Bob calls, I take the call right away.