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operators were paying us fees now—the base rate was around fourteen or fifteen cents per subscriber. So in 1986 we said to them, we’re hoping we’re going to acquire rights to the NFL and we will guarantee you that there will be no more than a thirteen-cent surcharge the first year. At an industry convention in 1986, we showed a group of them a business-plan projection where we assumed that 60 to 70 percent of the industry complied and 40 percent stiffed us. We discussed the plan and said, look, if 100 percent of you take it, the surcharge gets smaller and smaller, and that meant we ultimately got everybody. When we went out and started making those pitches in ’86, we hadn’t made more than three or four before the cable industry banded together and decided to create their own consortium to make sure we didn’t get the NFL rights and couldn’t come to them with a surcharge. They would get the rights and allow any interested networks to compete for the right to carry it.

Their problem was they had no guaranteed network vehicle to display those games on, they didn’t have a credible management team, and they couldn’t reassure the NFL that games would get cleared in syndication in the home markets so no one would be denied access to a home team.

BILL GRIMES:

Roger and I met with this consortium that had been put together, and they told us they had decided they didn’t want us to bid on the NFL games; they wanted the rights. But they said if they won the rights, they would guarantee the games would be produced by and televised on ESPN. We were quite surprised, but we were firm: “Negotiating for and obtaining sports rights is our business, not yours.” The meeting ended acrimoniously, which was nothing new with many of our meetings with cable system executives.

ROGER WERNER:

It was an ugly meeting. We were pissed off. I couldn’t believe after doing all the hard work to convince the NFL that this had merit, building the business model, and showing the operators how much money they could make on local ad sales and how many subscribers they would gain—all we got from the operators was them going behind our backs to try and create a competitive bid. We got up and walked out.

BILL GRIMES:

At the first CapCities/ABC/ESPN management meeting since the acquisition, there were more than a hundred participants, and it was indicative of how unimportant CapCities thought we were—and how feeble Herb’s support of us was—that I had tried and failed for Steve Bornstein and Andy Brilliant, our counsel, to be there. Herb told me we would have a private lunch with Tom Murphy, Dan Burke, himself, and Warren Buffett. I can’t remember whether Fred Pierce and Roger were there. Anyway, we went into a private room of the Phoenix Biltmore and I reported on our negotiations with the NFL and then the details of the day-before meeting with the cable-system companies’ consortium. Murphy and Burke asked numerous questions. Herb remained as quiet as he could until Murphy asked him what he recommended we do. He said, “It’s a tough call. The cable guys are our customers. I am worried that if we compete with them we will have continued problems. We could do this deal and still make money with them owning the rights.”

Buffett finally spoke and wanted to know my opinion—“the guy on the firing line”—and I stressed that cable operators were distributors and we were content creators and producers. We didn’t want our distributors to be our competitors in this business. Buffett said he thought buying it for ourselves would certainly make it simpler and agreed with me. Murphy agreed as well, and we were off and running.

ROGER WERNER:

The cable operators fought us down to the wire, but they didn’t have enough solutions that served the NFL’s interests, which were not just economic but also political. The NFL didn’t want to present their product in a way that would be embarrassing to them. They wanted guarantees about the level of presentation and promotion. They felt comfortable ESPN could deliver on that. There were a lot of little wrinkles that had to be built into