Calling it the "first phase" of an informational marketing campaign, ESPN has invested in a Web site (keepespn.com) and will use radio and print ads in Cox's top 10 markets to respond to the company's threat to drop ESPN from its basic-cable package over escalating carriage fees. Atlanta-based Cox, which also has a Web site dedicated to the issue (makethemplayfair.com), is protesting ESPN's request for a 20% price increase to carry its programming.
`we took it on the chin'
"We sat back and took it on the chin for the better part of a year because we were optimistic that these public attacks on our company would abate," said Sean Bratches, exec VP-affiliate sales and marketing, ESPN. "But they haven't. We're just trying to communicate to the public that ESPN is a vital and valuable part of their basic cable."
ESPN's longtime creative agency, independent Wieden & Kennedy, New York, is handling the campaign. Spending was not disclosed. Ads will run in Cox strongholds such as New Orleans Phoenix, San Diego, parts of New England and Atlanta.
Cox spokeswoman Laura Oberhelman said the company is not surprised by ESPN's campaign.
"ESPN is merely trying to deflect attention away from the real issue, which is their 20% price increase inflicted on cable and satellite consumers for the last five years," Ms. Oberhelman said. "In a world where the average American received a 4% pay increase and the average savings account earned just 1%, we just don't see how ESPN can justify 20% price increases year in and year out."
no more tiers
ESPN wants to avoid becoming a tiered cable station because that makes it more difficult to sell advertising. Less ad revenue could mean even higher monthly cable bills.
Cable companies, such as Cox, blame rising programming costs for the spike in cable rates. ESPN President George Bodenheimer and others said the increases come from upgrades in infrastructure, such as digital cable.
Cox has warned its subscribers and ESPN, as well as the Fox Sports cable station, that it will drop the networks or take them off basic cable and put them on tiered pricing when its contract expires in March 2004. ESPN is one of the most expensive basic-cable networks at about $1.90 per subscriber per month, compared to an average of 15› for other basic-cable stations. Cox says it is paying ESPN $2.61 per subscriber each month.
Cox's argument to consumers, at its most simplistic, is: Why be forced to pay for a station you don't want to watch? ESPN cites Nielsen Media research that shows 87% of cable subscribers are sports fans and 70% of Cox subscribers watch ESPN on a monthly basis.
"It's a big pissing match," said one media buyer who asked not to be identified. "The problem is, ESPN has to take this seriously."
Though Cox is the fourth-largest cable company in the U.S., ESPN's deals with the No.1 cable operator, Comcast, and satellite company DirectTV, are up by 2006.
"This is an unfortunate circumstance," Mr. Bratches said, "but we remain optimistic we can settle our differences."