Those Guys Have All the Fun - James Andrew Miller [134]
Cable subscribers would end up paying through the nose, but that wasn’t even the issue. This was a battle between titans in which the rich would get richer.
For Bornstein, the hardest part of the plan—and one of the toughest tasks he ever undertook as an executive—was talking his bosses at Hearst, ABC, and CapCities into forgoing one of their favorite things—cash—and accepting in its place signed agreements to carry ESPN2 on cable systems big and small.
STEVE BORNSTEIN:
The biggest fight I ever had was with Murphy, Burke, and even Buffett, trying to convince them that we should use retransmission consent to get value on ESPN2 as opposed to cash for their own stations. That was an incredibly difficult and arduous internal negotiation—one of my biggest battles ever.
Warren Buffett went along with it begrudgingly. He much preferred the cash, as did Tom Murphy, because that would have been better for the network—for the traditional broadcasting business. Our argument was you aren’t going to get cash out of these operators. It was the biggest disagreement we had with CapCities since they had taken us over. CapCities didn’t tolerate failure. That was a big bet. If it didn’t work, I would not have been around.
It was an inspired scheme that quickly caught fire—with the October 1 launch date of ESPN2 looming ever closer. In August, CapCities / ABC, in conjunction with ESPN, signed a deal with three big cable operators representing 2.6 million homes that allowed their systems to carry programming from ABC and Hearst-owned TV stations in exchange for adding ESPN2 to their rosters. In the end, not only did ESPN2 get a “substantial rollout” on their cable systems, but the network even got a fee.
Unfortunately, the plan was so good that other networks and cable systems got into the act, including the Fox network. Much more worrisome to ESPN were moves by Liberty Media, the cable giant that sought to come from behind and grow large enough to challenge ESPN.
FRANK BENNACK:
I got this call from Dan Burke, who is at this time the head of CapCities / ABC, saying, “Frank, you know this is going to cost a lot of money and, if you guys don’t want to go in it, you can stay in the original, you don’t have to be in ESPN2.” And I just said, “Dan, come on, you know I’m going nowhere.”
JOHN LACK:
In looking for elements for ESPN2, I wanted a good sports talk show aimed at a younger audience. We didn’t have much sports talk on ESPN because Walsh had never been interested in that genre; they all reminded him of Howard Cosell. They had Roy Firestone, who did interviews, but it was kind of bland stuff. So we looked around for a talk-show guy and the best ones are on the radio. On the West Coast, there was a guy named Jim Rome who had a hot sports talk show from San Diego that was just about to be syndicated on radio. His ratings were so high there that a syndicator—I think it was Westwood One—was just about to sign him up. So I went to interview him and liked him a lot. He was brash and young, and his dream was to be on someplace like ESPN. He wasn’t a great TV personality at the time—he was kind of awkward—but he had that great voice, a great mind, and he had the respect early of the trash-talking black and Hispanic audience. I thought he was good-looking enough to be an eventual star on television.
So I told Walsh, “Look, he is by far the best available, and he doesn’t have to quit his radio show, so he won’t cost us a lot of money. We can get him part-time, we’ll sign him to thirteen weeks, and if he doesn’t work out, we can always get rid of him.” John looked at the tapes and went gaga; he thought this was going to be Waterloo, and he was going to fight this one because he thought it flew in the face