Cox, ESPN agree to terms

Kevin Rademacher

Friday, Feb. 20, 2004 | 10:49 a.m.

Sports fans in the Las Vegas Valley can breathe easier.

Sports cable network ESPN on Thursday agreed to a national contract securing its position as part of the preferred basic cable lineup with Cox Communications, including the company's Las Vegas system.

The deal puts an end to a feud between the Atlanta-based cable company and the Bristol, Conn.-based Walt Disney Co. subsidiary. The battle featured national advertising campaigns from both sides challenging the legitimacy of their adversaries.

Cox's Steve Schorr, the vice president for public and government affairs with the company in Las Vegas, would not speculate on when a rate increase could be announced or how much it could be, he said an upward adjustment in 2004 is likely.

Historically, Cox has made rate adjustments in Las Vegas on March 1. Schorr said recently that the company would delay such a move until after the contract negotiations with ESPN were complete. On Thursday, he said the company would now review its rate structure.

"We are going to try to delay that as long as we can," he said, adding that everything from higher gasoline costs to health costs have increased the company's cost of doing business.

During the spat with ESPN, Cox claimed that the sports network had demanded annual rate increases of as much as 20 percent.

The new nine-year deal will give ESPN average annual increases of about 7 percent, Schorr said.

He said the high-profile effort to secure a reasonable deal was a critical step in keeping local cable rates low.

"This is really a victory for our customers," Schorr said, crediting more than 100,000 letters from Cox customers to Congress and ESPN for turning the tide in the negotiations.

ESPN spokeswoman Rosa Gatti said the dispute never had to get this far. Cox only saw higher rate adjustments when it declined a long-term deal last summer, she said. Since it declined that deal, the old contract triggered a 20 percent increase in August 2003, she added.

"I know for a fact that offers were lower than 20 percent going back a year ago," she said. "Subsequent proposals as well were much lower than 20 percent."

The only thing Cox and ESPN seemed to agree on was that ending the feud is good news.

"This allows both companies to go forward," Schorr said.

Gatti said: "The important thing is that a resolution was reached and it is good for customers."

The new deal will cover ESPN, ESPN2, ESPN Classic, ESPNEWS and ESPN HD in Las Vegas. It also will add the Spanish language channel ESPN Deportes to the local lineup.

Cox has about 401,000 customers in the Las Vegas Valley and about 1,000 employees.

The deal could have implications on how negotiations proceed between other major U.S. cable operators. While Cox's contract was the first to come up, ESPN also is facing negotiations with Time Warner Cable and Comcast Corp.

Schorr also said the lower rates could be a sign of change in the sporting world. The outcry from customers may indicate that fans are growing weary of higher prices for event tickets and stadium hot dogs as well as cable programming.

He pointed to the recent trade of infielder Alex Rodriguez to the New York Yankees after the Texas Rangers struggled to keep up with his $250 million contract.

"Who ends up paying the price for these contracts are the consumers," he said. "Sooner or later the consumer has to pay the bill. ... It's got to be fair."

The Greenspun family, owner of the Las Vegas Sun, is a minority investor in Cox's Las Vegas system.