Cox may drop Fox Sports, ESPN from basic package

Charles Odum

Tuesday, Oct. 7, 2003 | 11:12 a.m.

ATLANTA -- Some cable TV viewers may have to decide if they are willing to pay extra for ESPN and Fox Sports.

One of the nation's largest cable operators says the sports channels have become too expensive for its basic packages and should become premium content.

Jim Robbins, chief executive of Cox Communications, says his customers are ready to embrace the change he says is forced by the fact the ESPN and Fox Sports channels combine for 8 percent of Cox's cable viewers and 32 percent of its costs.

"We're a company that is very customer-focused," Robbins said Monday. "We wouldn't be doing what we were doing unless we were fairly certain it would meet with our customers' satisfaction."

Cox is the nation's fourth-largest cable operator and the main cable company in Las Vegas. The company's contract with Fox Sports expires at the end of the year, and its contract with ESPN runs through the first quarter of 2004.

Though ESPN and Fox officials insist they will not allow their content to be placed in premium packages, Robbins predicts other cable operators will follow the Cox lead unless the sports channels "can somehow get the costs down to some reasonable level."

"The price of ESPN today is more than the top seven-rated (advertising based) networks combined," Robbins said. "This is one area where we think we have got to take a stand."

Robbins proposes moving the sports channels out of the list of expanded basic channels and into a premium tier of channels.

Sean Bratches, ESPN's senior vice president of affiliate sales and marketing, insists the sports networks, which also include ESPN News, ESPN2 and ESPN Classic, will not become premium tier content.

"I don't foresee a scenario where we would permit the distribution of ESPN service in a manner Cox is suggesting publicly," Bratches said. "Clearly we prefer to have those discussions take place in the board room as opposed to the press."

Bratches said customers would pay more in monthly service and equipment fees if ESPN's channels were marketed as premium offerings. More customers would have to lease cable converter boxes as well as pay extra fees for the premium channels.

Robbins said Fox is requesting a 35 percent increase in its current rates and that ESPN wants a 20 percent increase.

A complicating factor in the negotiations is the cable industry's battle to protect its market share against satellite TV.

News Corp., the parent company for Fox, is in negotiations to purchase satellite content provider DirecTV. If that deal is completed and Cox makes Fox Sports premium content, Robbins acknowledges he could risk pushing customers to purchase satellites.

That risk becomes more of a factor if Cox follows what Robbins calls "the most extreme" option of taking the sports channels off the Cox lineup of channels, if only temporarily.

"We worry about that," Robbins said. "If we drop the Fox regional sports channel and they put it on satellite, then (customers) have to go to satellite to get it."

Robbins said a disruption of service "is not the option we are looking for because Fox and ESPN both offer a great product."

A Fox Sports spokesman, Nick Weinstock, said the company would not discuss its negotiations with Cox Communications "except across from the table with them."