ESPN preps for wireless comeback
EmptyCHICAGO -- Walt Disney Co.'s ESPN network will soon announce new licensing agreements for its wireless phone content, the network's chief said Wednesday.
"We simply recognized quickly that we needed to adjust our business model and that's what we're preparing to do," said George Bodenheimer, president of ESPN and ABC Sports and co-chairman of Disney Media Networks. "You'll see an announcement from us relatively shortly on that."
"The Mobile ESPN application is going to be available to fans, just in a different method than how we started out," he said in a telephone interview.
The comments were part of a wide-ranging conversation about ESPN's international growth plans, the value of sports television rights fees and the impact of the National Football League's cable network.
In relation to Mobile ESPN, the network's plan to license its brand to existing carriers as an add-on service would complete a shift from a previous strategy.
In September, ESPN said it would shut the Mobile ESPN phone business by year's end. Analysts said the much-hyped venture couldn't draw enough subscribers, and the company said it would spend $30 million on the shutdown.
The service was launched in February on Sprint Nextel Corp.'s network, but analysts said the problem was a specially designed $199 cell phone that forced most users to switch wireless service.
Bodenheimer also said international markets will be a key driver of growth for ESPN. He pointed to a new TV contract in India to televise cricket and last week's announced acquisition of NASN, a European sports network.
ESPN does not disclose international revenue figures, but Bodenheimer said the figure will grow and Europe will be a focus.
"We're looking at other opportunities," he said. "I see international expansion as a focus of our company."
The company plans to launch the 11th version of its popular "Sports Center" highlight show in Australia and New Zealand early next year, and this fall is rolling out versions of its Soccernet.com Web site in French, Spanish, German and Italian.
"We're putting our money where our mouth is to show you how we're working to make these products global," Bodenheimer said.
He dismissed concerns that ESPN's profit margins would be squeezed by rising sports TV rights fees.
National Basketball Assn. commissioner David Stern said last month at the Reuters Media Summit that the U.S. sports league had opened talks with Disney and Time Warner Inc. about extending current TV deals that expire after the 2007-08 season. Stern said then that he expected a "healthy" increase from the current six-year, $4.6 billion contract.
Bodenheimer said: "What we are purchasing from leagues is so much broader these days than just a game to fill up a three-hour window.
"With the NBA agreement, we're fueling anywhere from eight to a dozen ESPN businesses, including around the world," he added. "It's way too simplistic to look at the rights fee without an equal analysis of what it is you get for that."
Bodenheimer also said the National Football League's 3-year-old cable network is not a future rival as some analysts have suggested. NFL Commissioner Roger Goodell outlined plans at the Reuters summit to add more nonleague football games to the network's lineup over time.
"Obviously, we televise quite a bit of football so anything that strengthens interest in football is a plus," Bodenheimer said. "We're really a different business than the NFL Network, which is a single sport network."