Afternoon, all of you. Thank you. My little highlight reel, here I am in the world of highlights, Got to bring your own reel. By the way, Lowell, my choices are just a little bit better than yours. Yankees won a doubleheader SJ2 shutouts, Green Bay, not too bad.
Los Angeles Clippers 57 games most in their history. I'm not going to comment about the Knicks. Anyway, it's good to see all of you. Welcome to ESPN. Certainly nice that we could all gather here and talk about one of assets too and to present a deep dive as we're calling it about a lot of the issues and the elements that are relevant to and top of to what is such an important part of the World Disney Company.
And while we don't specifically break out, as you know, ESPN's results. You can see from this chart that our cable network business contributed about 1 third of our revenue in fiscal 2013 and more than 50% of our total operating income. This includes ESPN and our global Disney where we've done a fair amount of investing. ABC family, of course, our ownership stake in the A and E Television Networks, A and E lifetime. Now we've grown these businesses nicely over the last number of years, actually 8% compounded growth since 2,008 and clearly given the size of this business, this contributed mightily to our strong company EPS owns an incredibly strong, valuable and unrivaled portfolio of brands.
I think that tape that we just ran demonstrated. And in fact, a pillar of my strategy during my tenure as CEO has been to strengthen our brands or to acquire and invest in other brands, notably, of course, Pixar and Marvel and Lucasfilm. And this is a great time, I think, to consider the value of that brand strategy to the company Given the immense success of Frozen, which has continued to set global box office records as the highest grossing animated Also, Captain America already hit $500,000,000 in total global box office, and we're just getting on production for Star Wars VII. So clearly, we have been very, very brand focused as a company. And we also believe that increased competition In today's world, an increased choice for the consumer actually heightens the value of brands.
We think the value of brands actually has risen We're certainly experiencing that as a company in today's marketplace. Now beneath all these brands are a number of sub brands or we Call them franchises. And we've created and nurtured many of those as well, including some pretty obvious ones in Mickey Mouse and the Disney core characters, Toy Story, Cars, Marvel's Avengers, Disney Princess and most recent one, of course, Star Wars. Now like brands, we also believe that in today's world, there's great value to franchises as well. And ESPN has certainly created its own of valuable franchises too, many of them you'll hear about today, including SportsCenter, College Game Day, X games, baseball tonight, pardon the interruption, Mike and Mike and many others.
We believe franchises drive long term value for the company and thus deserve more investment and more of our support. And in fact, later today, you'll see our new SportsCenter studio, which I think is a great example of us investing in the value of a franchise, investing not only to continue to protect it, but to continue to grow its value. Now I take great pride in ESPN's Success. ESPN has actually reported to me since 1994 when I was COO and President of Capital cities ABC. I'm also a big sports fan.
I spent 13 years of my now 40 years at the company, it's hard for me to believe except when I look in a mirror. I spent 13 of those 40 years working for ABC Sports. So sports, sports television is definitely in my blood. And I can assure you that we're going to continue to invest in ESPN, in its people, in its programming and in its technology in order to perpetuate its significant competitive advantage. You're going to hear a lot about that too today.
And so today, we want to give you more insight into the breadth of ESPN's rights portfolio, the value of its original content, the nature of its competitive position, the strength of its team, the story today is actually to be told by them and why we are so confident in ESPN's future. And now it's my pleasure to introduce the real host of today's event. That's John Skipper. I've known John actually for almost 20 years when he was working at Disney Publishing and then in his earliest days at ESPN, watched John grow tremendously over that period of time. For those of you don't know John, he brings a wide array of talent and experience to this position.
He's got many interests as well and he blends a strong creative sense with, I think, really solid business skills, which is what I like to look for in a senior executive of the company. On top of that, he just loves sports. If you know him well, he also loves music and literature and technology and a whole lot of other things. And so it is my pleasure To introduce John, working with John certainly has been a pleasure for me. I can't think of anybody I'd rather be running ESPN than John Skipper, and before John comes up, please enjoy another highlight reel from the company that makes better highlight reels than anybody, ESPN.
Thanks.
So thank you, Bob, for those kind words. Good afternoon, sports fans. Welcome to Bristol, Connecticut, ESPN launched on September 7, 1979, not more than a football field or 2 from where you sit. On January 1, 2012, I had the great privilege of becoming ESPN's 7th President. I worked for the 6th President, George Bodenheimer, for all 13 years of his tenure.
During the last 6 years, I was Head of Content. You folks are certainly aware of the results of George's leadership, A remarkable 13 years of expansion, innovation and strong financial performance. I am fortunate to have retained the entire executive team that worked with George to produce those results. The continuity has been seamless and productive as ESPN has continued to contribute meaningfully to the growth of the Walt Disney Company in 20122013. I'd like to give you some sense of what that executive team that's prioritized over the past 2 years to achieve that strong performance.
1st, and you're going to hear a lot about this today, our portfolio, which we've broadened and strengthened in the past 2 plus years. We signed an expanded NFL deal that includes 8 more years of Monday other than men's basketball and importantly acquired the rights to the new National College Football Playoffs for the next 12 years. The acquisition of these long term rights ensures that no significant shift from our current preeminent position in rights can occur in this No competitor can approach our portfolio. I'll give a little bit more detail on this in just a bit. 2nd, in the midst of a lot of public hue and among programmers and distributors, we have quietly extended our deals with 8 of the 10 largest distributors, Time Warner Cable, Cox, Charter, monthly subscription fees we have will also extend to the next decade.
3rd, we have moved aggressively to ensure that our resources are aligned with growth initiatives. We exited unprofitable television businesses in Europe, divested our stake in our Asia joint venture and we've shifted those resources to high growth businesses in Brazil, Argentina, Colombia and Mexico. Domestically, we have shifted jobs from low growth areas to new mobile and digital efforts, and you're going to hear a lot later, in fact, immediately following me from Ari Balgren about the resulting growth in our position there. Finally, we have continued ESPN's long standing strategy quite consistent with The Walt Disney Company's strategy Bob of embracing new platforms and technologies, we relentlessly introduced new products and services. In the past 2 years, we put ESPN Networks on Roku, PlayStation, Xbox.
We created the 1st media partnership with Twitter. We embedded the 1st video player on Facebook page. These initiatives have allowed us to continue growing the usage and viewership of ESPN. And these moves have strengthened our position with our key constituents. I like these numbers.
With fans, with advertisers and distributors, we are number 1 and number 1. We're the favorite network among sports fans for 20 years running, and that is among all networks, cable and broadcast. For the past 14 years, cable operators have ranked us number 1 in perceived value. And just to prove they understand the Roman numeral system, they've ranked ESPN 2 as having the 2nd highest value for the past 9 years. For 10 consecutive years, they have ESPN as the most important network in their system.
Among advertisers, ESPN is at the top in multiple You're going to hear a lot of number ones here, nothing more important than the fact that we're the number one network, again, among cable and broadcast on which They intend to increase spending. We're number 1 in terms of the most valuable programming, appealing demographics, use of to advertise and the number 1 in innovative multi platform opportunities. It's John Wooden, Bill Russell, Iowa Wrestling Ben Hur all rolled into 1. We believe we're in a stronger position than 2 years ago, and this strong position allow us to encounter ongoing challenges. We have new competitors.
Consumers have more video choices. There are potential challenges to the pay television market. There's a movement of ad dollars to new digital and social platforms, and sports rights cost more money. However, we have an experienced and stable management team used to dealing with these issues and with a demonstrated track record of We have an unprecedented aggregation of sports rights. Sports will continue to be ascendant in culture and they will become more valuable in media because they are unique, they're exclusive and they're the only content that must be watched live.
Our largest revenue stream a large business, though it will exist in a more complicated and dynamic atmosphere, which will require some evolution of our current business model. In our recent deal with DISH, we authorized an over the top service targeted to broadband only homes. Throughout the day from the ESPN team. That is our strong position, our ability to continue to grow and thrive. You're going to be quite impressed, I think, what you see today.
And I certainly appreciate the opportunity for me and my team to present that story to you. Again, thank you, and welcome to Bristol.
Thank you, John. You guys will all hear more from John shortly. But I'd say over the last year, the question that we've been asked about most frequently across our entire business has to do with the competitive environment in sports. So we thought the best way for us to start the presentation part
of the day would be to talk a little bit
about why we've part of the day would be to talk a little bit about why we feel so great about how well we're positioned. And I think for that, the best person to talk about it is Arty Arty is ESPN's Senior Vice President of Global Research and Analytics. I think you're going to find this presentation very informative. There's a lot of data here, get ready. And with that, let me welcome up Arty Bolgren.
Thank you, Lowell, and welcome, everybody. It's a pleasure to be here. My name is Artie Baldwin, and I run research and analytics for ESPN. I'm celebrating my 25th year with I've been with ESPN the last 18 years. Prior to that, I spent 7 years at ABC, and I started my career in research at the Nielsen Company, where I spent 9 years.
I'm a New Yorker, a graduate of CW Post College on Long Island, the home of the mighty Post Pioneers. Actually, nothing mighty about them. Not powerhouse by any stretch of the imagination, but they're pretty good in lacrosse. Actually, the girls are pretty good in lacrosse. And this is where things get tough.
I'm also a fan The Knicks, Jets and Mets, trifecta of futility for sure. What can I say? We all make bad life choices, but it stopped with my sports. And it begs the question, why am I a sports fan at all? And to that, all I can say is wait until next year.
Meanwhile, I'll continue to watch Carlos Beltran hit great home Now, my job today will be to provide you with some insight that will demonstrate that ESPN is absolutely playing at the top of its game with a lot to look forward to. I'll give you our view of the multi channel landscape and tell you a few things about sports fans that you might not have known. I'll focus on our strongest asset, which is the ESPN brand how well we're doing in our business, which is television in our core business, which is television and how we're expanding our audience through digital media. You'll learn why ESPN has become America's quintessential cross platform media company and why ESPN a competitive edge to grow our advertising business going forward. So let's begin where ESPN started with our view on the state of multichannel.
Now with so much talk about cord cutting today, we forget that multichannel subs actually grew steadily through the recession and since 2010 have remained above 100,000,000 subs. In fact, subs continued to grow right through 2012 to a historic high until the first net loss at the end of 2013, a loss that was estimated anywhere between oneten of 1% according to LRG, the Leichtman Research Group, or twoten of 1 according to Kagan, which is the data that you see here. Now, we acknowledge that cord cutting is real, but based on our cord cutting research, cord cutting levels remain fractional and almost always driven by tough economic decisions, not by a preference to watch television content on alternate means. And sentiment to cut the cord has not increased in the past year, so we can expect levels to remain fractional. Cord deferring or cord nevers is another phenomenon,
which involves mainly younger households who
are mostly renters, which involves mainly younger households who are mostly renters and are simply putting off multi channel subscriptions to save temporarily. As a result, multichannel subs have lagged household formations of late. But ultimately, as these consumers start families and or improve financially, many of them will subscribe. Now among those who are considered best candidates to cut the cord or to be cord nevers millennials, multichannel penetration remains high, around 75%, according to Nielsen. And millennial subscribers kept pace with the overall rate of growth in multichannel from 2,007 to 2013.
Now, presence of family is clearly a driver of multichannel subscriptions. And similarly, interest in watching sports is an attribute that also To that point, almost all current multi channel homes tune into sports over the course of a quarter, and sports viewers are 3 times less likely to even ever consider cutting the cord. So let's talk more about these sports fans. The United States is clearly a sports nation. We're passionate about sports and will go to great lengths to follow our teams, even suffer years, even decades of It's a pastime for most Americans and a key driver of media usage and social activity.
Yeah, that's me with my buddy, Mr. Met. It's amazing how he keeps that smile. And yes, no matter how grim the outlook, I will be watching, listening, and checking stats and getting my alerts from espn.com Every change in score at least through September. Okay, maybe through the All Star break.
Since 1994, we've monitored the size, avidity and composition of the sports fan population with the ESPN Sports poll. And from it, we know that in 2013, nearly 9 in 10 Americans were sports fans. That's just over 231,000,000 sports fans, which is an all time high since we've been measuring. The poll measures the level of sports fan avidity based on a Casual fans are 4 to 7 on that scale to represent 42% and occasional fans 1 to 3 on the scale of 15% the population. Avids account for the heaviest consumption of all things sports and are most representative of ESPN's core audience on a daily basis.
For example, the sports interviewer. They're younger, male skewing, more affluent than the general population and more diverse in terms race and culture. For example, the average sports interviewer is 32% more likely to be a bicultural Hispanic male than the population. So ESPN can serve a narrow, selective and valuable audience such as avid fans, but we also have the ability to achieve and send the fan base for a sport. For example, the total fan base for college football in 2013 was 63,000,000 people aged 12 plus.
But during the 2013 season, nearly 180,000,000 people tuned into football programming across all ESPN networks. That's 70% of the population reached by just one sport and just on ESPN, extraordinary, extraordinary numbers and numbers that exemplify ESPN's strong position in college sports, and John's gonna elaborate on that a little bit later. So ESPN benefits from a very large and passionate nation of fans to serve, But the single biggest driver of ESPN's success is the brand and what we mean to fans. Since we started in 1970 ESPN has evolved from being a highly unique and niche brand, essentially a narrowcaster, to one that is a household name, a leading consumer brand, but we still maintain an important relationship and relevance to the core avid sports fan. In simple terms, they see ESPN being absolutely synonymous with sports.
It's all we do, and we do it with authority and personality. Here are just a few brand highlights Now this chart shows that nearly 90% of Americans are familiar with ESPN, which means that they know something about us, higher than any other sports brand including the Olympics, Nike or the NFL. And in fact, it's almost impossible to get to higher levels. Today, ESPN is more than just the leading sports brand. It's an elite consumer brand based on trusted industry data from BAV Consulting, a division of Yonge and Rubicam.
As you see on that chart, in terms of key pillars of brand strength and brand stature, the horizontal and vertical access here. ESPN is a leadership brand on par with consumer brands such as the Walt Disney Company, Coca Cola, Apple and Google up there in that neighborhood hand quadrant, upper right hand quadrant. And we're the only sports media brand with that kind of brand equity. Fact is ESPN is number in the repertoire of choice when it comes to sports media and for some fans the number one choice in media overall. So that when a fan thinks about sports We're just even turning on the television, they think about ESPN first.
That's the power of our brand. We didn't get to this point by accident. We've worked really hard to cultivate a brand that resonates with our fans. Now here are 2 spots which highlight the essence of our brand as well as a spot for the
Michael Jordan. Oh. Michael Jordan, 8 o'clock.
Oh, that's me. Oh. Oh. Oh, man.
How are you doing?
Really?
Let's go.
Roll tide.
Roll tide. Roll tag.
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an honor. Roll
to fans a connection that started in television years ago. To that point, ESPN since 19 has consistently received the most mentions as the favorite television network among men in an annual national probability survey conducted by research firm SRBI. These are the latest results from And ESPN typically ranks as the favorite cable network among adults. Now when we narrow the competitive category down to Just sports television, ESPN's preference in the repertoire of choice grows dramatically. For example, when thinking about watching sports fans are 9 times more likely to name ESPN over number 2 Fox Sports as their favorite.
It's not even close. And the combination of brand preference along with the most live hours of high quality event studio content on television, plus compelling original content like 30 for 30 and the X Teams has resulted in ESPN being the most watched sports network in 2013 by a very wide margin in a year where we've in a year where we've probably faced the most competition in our history. So in this next chart, you see a summary of total day average minute household audiences for nationally Sports Networks for 2013. ESPN alone delivers an audience that is more than 50% larger than all other national sports networks combined. This next chart, we include the other ESPN networks for the comparison.
Note that ESPN2 has the 2nd largest audience, which is 70% than its nearest competitor, the NFL Network. And when you add up the ESPN Networks, in combination, they deliver more than twice the audience of all other sports Now there's good reason for ESPN's significant audience advantage. With SportsCenter and other popular live studio shows as consistent assets throughout the week regardless of the sport event or a matchup each day. ESPN has become a destination for millions of sports fans, meaning our viewers tune in for more days more frequently than they do other networks. For example, in Q4 20 Compared to the highest rated cable networks, ESPN still leads in number of days viewed.
Let's talk about growth. While the flagship ESPN has increased its audience through the years, as you see here in the red bars. Our other networks have grown almost exclusively incrementally to ESPN. In the last 5 years, the other ESPN have increased the overall ESPN TV network audience by 46%. And between 1994 and 2013, ESPN's total television audience has grown 127%.
Now, a significant point of difference ESPN is that we air the most live content in television. In 2013, ESPN aired nearly 23,000 hours of live event or studio programming across our networks. That's about 2 and a half hours of live content for every hour in the year. On the ESPN flagship network alone, seventy percent of the telecast hours are live. As a result, ESPN remains one of the least time shifted networks in television.
In 2013, 96% of And while sports is still viewed live, more and more scripted content is being time shifted, particularly in primetime. In fact, live viewing to broadcast prime content has declined 24% in the past 5 years to just 58% in the current TV To date, that's through February. In that time, the share of live viewing going to sports has actually increased. Sports fans simply need to watch sports and even sports news live, a behavior that's not likely to change much in the future. And so the time shifting of non live television programming actually creates a greater opportunity for sports to be seen as other programming is temporarily put on the shelf.
It takes So that's an overview of our very strong position in television. Now I'd like to spend a little time on ESPN Digital Media. In 2013, ESPN Digital Media had a terrific year. Including all PC and mobile platforms, ESPN Digital media led the sports category with an average 31% share of the digital sports audience according to Comscore's multiplatform That's larger than our next 3 competitors combined. It's larger than Yahoo Sports, Bleacher Report, and nfl.com combined.
And ESPN's big point of difference engagement. If you look at the 2nd column here in minutes per user, with the average user spending nearly 100 minutes with ESPN Digital Media Platforms each month, that's more than twice the amount of time they spend with any other competitor. So ESPN Digital Media is the undeniable leader in engagement, but a sports category record in unique visitors by reaching more than 60,000,000 users over 5 consecutive months. And in September, ESPN set an all time record in the sports category for reach with 73,000,000 unique visitors. As you see here, this record reach is due in large to our growth in mobile platforms.
36% of ESPN's users relied solely on ESPN mobile platforms, and another 29% accessed ESPN content both online and mobile during the month. The audience scale that ESPN Digital Media achieves today, and I mean just web app and app content on PCs from mobile devices actually significantly out delivers the audience of our rival television sports networks. Since the launch of Fox Sports 1 last year through end of 2013, ESPN Digital Media's total day average minute audience, essentially a rating, was 38% higher than Fox Sports 1 and 54% higher than NBC Sports Network. Now one of our fastest growing and innovative digital platforms is WatchESPN. You can hear a lot more about WatchESPN throughout day.
It's now available in 70,000,000 homes, and it's a service that truly embodies ESPN's mission seen very high engagement levels for watch ESPN on Apple TV and Roku devices, which launched just late last year. For example, watch ESPN on Roku averaged almost 8.50 minutes per user. That's about twice the rate of viewing see for our television networks on traditional multichannel platforms, perhaps an indication of how a more interactive environment will increase viewer engagement in the future. Now we're also seeing solid growth in ad starts. That's up 91% year over year.
And the WatchESPN audience is TV viewer at a median income of $74,000 which is 54% higher than the typical TV viewer. So, ESPN's audience has been expanding on TV across multiple platforms, but it's no accident. Since establishing our mission statement to serve sports fans anytime and anywhere, we have grown our audience on each new platform and more than double the number of ESPN multi platform users. This is our future. But in order to monetize this value, we need valid, reliable and timely measurement that's accepted industry wide.
But the industry is moving too slow. So we decided not to wait and instead we chose to lead the industry in First, 5 platform measurement system for the industry. It's a project we call Project Blueprint. Project Blueprint was designed to measure ongoing usage of content across TV, radio, PCs, smartphones and tablets, and for the first time ever, measure neat net reach and time spent across all of those platforms. Now upon sharing this data with the industry beginning less than a year later, the reaction, as you can see here from these clippings, has been overwhelmingly positive.
So let me share with you what Project Blueprint is telling us about ESPN's multiplatform audiences. Now the most important fundamental measure that provides that has never existed before in our industry is counting net unduplicated reach of audiences across these different platforms. So for the first time, we know that in the average month, ESPN content on TV, radio, PC, smartphone or tablets delivers reach of over 190,000,000 adults or 79% of the population in the average month and 101,000,000 men or 86% of that population in the average extraordinary. To give you an idea of the significance of this reach, consider that in the average month during the same period, there were 196 adult Internet users in the United States across PCs, tablets and smartphones. So essentially, ESPN's multi platform reach is as big as everyone on the Internet.
Just as impressive, in just one day, ESPN Media can reach 4,000,000 adults, that's more than 1 in 4 adults, and 36,000,000 men or nearly 1 third of all men. And the exclusive reach of ESPN Radio and Digital media actually increases the reach of ESPN TV by about 50%, important information to advertisers who need to get their message seen, let's say, today to get seats in a movie theater for tomorrow's premiere. The fact and Project Blueprint has also given us a lot of For example, it's exploded the misconception that digital media would cannibalize television. The fact is that as more ESPN media platforms are used, more time is spent with each and every platform, including television. In this chart, we compare the time spent with ESPN in the average among those who only watch TV only watch ESPN on television watch us on TV and use one other platform either a digital radio platform and watch ESPN on TV and use 2 additional platforms, digital and radio.
Now, 2 things happen in this case. The overall time spent with ESPN Media more than triples from 5 hours to 17 hours for the multi platform user on the right hand side. And at the same time, TV viewing goes It's a rising tide that floats all boats. Now increasing audiences across platforms is great, but what's even better is the positive impact that it has for TV, radio, digital, and ESPN, the magazine. Our tracking research for advertisers, which we do on a continuous basis, tracks the audience that use 1, 2, 3, or all 4 of these platforms.
And what is clear is that ad campaigns running across platforms amplify the marketing message. In this case, simple ad awareness can improve by as much as 20 points for a campaign. This is our future and is why advertisers are expecting to increase their in multiplatform campaigns from 20% to 50% in the next 3 years, according to the Association of National Advertisers. So
here are
the 5 things I want to leave with you today. 1st, multichannel subs remain near historic The ESPN brand has never been stronger. ESPN is number 1 in the repertoire of choice among sports fans. 3, ESPN is the clear leader in sports television, and we're facing our greatest competition, and we're leading them by a wide margin, delivering more than twice the combined audience of all competing sports networks combined. 4, ESPN is growing across media platforms, with multiplatform users spending more time with each and every ESPN platform and is fueled in large part by the growth of ESPN Digital Media, which led the sports category in every single metric.
And finally, ESPN is a premium advertising environment that is poised to grow from increased cross platform investment And the assurance of a live audience. So if you think we do this only for the money, I'm greatly offended. The truth is we do it for the kids. The more than 30 whose parents name their children after the number one brand in media and by the way the millions more who have even considered it. Let's face it, nobody's name of their kids Fox Sports 1.
Thank you very much.
Thanks, Hardi. Thanks, Hardi. That's great. Look, I hope that gives you some of why we are so confident about our position in the marketplace. Now, admittedly, that was rather detailed dense presentation.
So, we thought it'd be fun a moment of levity and what says levity more than bloopers.
And just as I'm
I think the takeaway from that video is if you need to See Dick Vitale without pants, you should be thankful. It's an old grainy video and not HD. Look, another driver of our strong competitive position is our vast portfolio of sports rights. And Jon Skipper in his current role as President and in his previous role as Head of Content has been intimately involved in negotiating all of ESPN's rights deals. So I don't think there's a better person to come up and talk to you about this portfolio and our competitive position than ESPN's President and my fellow co suffering
I know it never it felt like I never left. It feels that way to all people who work at ESPN, too. You'll notice there were no bloopers from the last and a half years as I've had an initiative to eliminate mistakes. Okay. I want to be clear about one thing in Artie's presentation, he suggested that we do it for the kids and we do do it for the kids, but we also do it for the money.
I don't take any offense. I wouldn't think I would take any offense from this audience for doing it for the money. I've had a long history at Disney Company. I actually joined Disney Consumer Products in 1990 out in Burbank, California, as Bob referenced before. I moved to New York City to start ESPN Magazine in 1997, managed our digital businesses in Seattle, Washington in 2003 through 2,005, Moved back to New York City in 2003 to manage our ad sales businesses through 2,000 I think I got some of those dates wrong, but you get the picture, I think.
And then ran our content group for 6 years here in Bristol, Connecticut from 2006 to 2011. Like Arty and Lowell, I'm afflicted with the New York Tottenham, if you're not familiar, actually is the New York Mets of the English Premier League. So it's kind of the same thing. I'm fortunate to Follow one significant winning team, and that's the North Carolina Tar Heels. I'm in opposition here with Lowell, who's a Duke graduate, of course.
Of course, I'm Tar Heel born bread, which explains this accent as well. And I've tried very hard. I don't appear to be able to do anything about it. I'm going to take A few minutes next to talk to you about our programming strategy at the company. Central to that strategy is LiveRites, and I'm to get out of the way here because this impressive slide is hard to read because there's no way to display the number of premier properties we have locked up long term without this eye chart, and we'll bear down on it so you can see it a little bit.
We have the broadest and deepest This set of rights in the industry and the length of these deals assures that the position is unassailable. Among the 3 most important professional We have the NFL and Major League Baseball through 'twenty one. We have NBA through 2016, and this represents an extraordinary content. It's Monday Night Football. It's baseball games on Sunday night, Wednesday night, and Monday night, NBA games on Sunday afternoon, Monday Wednesday, we have playoff games throughout the NBA season.
We have playoff games starting Saturday all the way through the finals, which we hold And beginning in 2015, we'll hold all of the rights to U. S. Open Tennis. The only place you'll be able to see those two events is on ESPN. I'd be remiss if I didn't mention a spectacular event we're going to have this summer, which is the World Cup Brazil.
I believe we will win, but I will assure you that our results do not depend upon it. Our longest deals are with college conferences, including all the NCAA championships other than men's basketball through '24, Pac 12 through 'twenty four, Big 12 through 'twenty five, the Rose Bowl and the College Football Playoffs through 'twenty 6, ACC through 'twenty seven, and this one won't even fit on the chart. This says through 2,034, we hold the rights. And despite being an ACC fan, I'm very happy to have those SEC rights. It's the most rabid fan based on the company in the country, and you're going to hear more about that in a little bit.
Now if you look at these and you want All right. I was told it was a tough crowd. Here is a more aesthetically pleasing way to look at the rights We have rights agreements with all 21 of these major entities. We have more games and more hours of quality national rights than all of our competitors combined. Obviously, the competition does put pressure on rights fees, and some have asked, perhaps some In this room about our ability to sustain growth as the fees increase, well, it's quite simple and very analogous to what you do.
We manage And like many of you, we manage that portfolio for profits. We have long demonstrated clear prioritization about what we buy and financial discipline relative to our overall spend. And within those parameters, we have still assembled A portfolio that will allow us to maintain our competitive adventure competitive advantage with our rights portfolio for quite And this bleak desert environment is meant to suggest that there are only 2 deals to be done in the next in the rest of this decade, 1st with the NBA and then with Big 10. And obviously, I cannot provide you any guidance as to the likelihood of our renewing deals, but you will see that we have a clear successful track record in renewing those things which we prioritize. It's also important, and you heard Artie talk about multiplatform and how we use our rights.
We acquire rights in a dramatically way than others. And we've been doing this since 2,006, 2007, which is unlike the traditional network model, we do not acquire 3 hour game Windows. We acquire rights broadly to use across all platforms. We have games we can show on all platforms. We highlight rights to Fuel Sports Center and other news and information programming.
We get data for digital platforms, radio We get unique access and content that allows us to continually launch new products and services. And in that regard, as the inestimable Professor Balgren showed you, we have long rejected the notion that new media cannibalizes existing usage. As the chart above illustrates, we hold cross platform rights to the 5 most popular sports in this country. That is a position that no particularly, as I mentioned before, in Latin America and Russell Wolf is going to be up here a little later to talk to you about those businesses. Of course, and again, you heard a little of this from Marty, there's no platform more important than our signature news and If you walk across any college campus and peer into dorm rooms, you will see ESPN owned.
If you're in the College Union, you will undoubtedly see being on. Walk through any airport, and ESPN is the ubiquitous background of the terminal. Walk through any town, peer through the windows of a bar, and ESPN is guaranteed to be on. Now if you go into the bar, you can get a better view and an adult beverage. It is a tough crowd.
I guess finance is not funny. It's serious business. SportsCenter was the first program on our air September 7, 1979. It is now available 24 hours a day, 8,760 hours per year. And yet, as you're going to see later today in our studio, hear later from some of our executives, we're in the process of the most improvements ever to our signature programming to our signature program.
And we complement SportsCenter with an array shows that covers every major sport and in almost every case is the signature programming in this programming that sports. You see here PTI, which is the highest rated daytime studio show in the history of sports television. Mike and Mike has been The sports morning show of record for nearly 15 years. College game day is required viewing for fans on Sunday morning. This past year, for the first We went head to head with Fox Sports 1's new college football show, and we beat them 28 to 1.
That means we had 2,000,000 viewers on average Saturday, they had 73,000. I'll try again. If you put this in the perspective of this room We have 100 folks here. 97 of you will tune into College Game Day on Saturday, and 3 will tune into Fox Sports 1. I'm going to try again.
We're in the process of identifying those 3 people, and you will be removed from the room at the next break. There we go. At ESPN, we have a long culture of risk taking. Our goal is to do something that many companies consider to be contradictory. We want to be the clear leader in share, but remain the clear leader This is a remarkable slide and shows a selection of the 80 new shows and content offerings we've launched just since
January of 2013.
That's in the last January of 2013, that's in the last 15 months, we have launched 80 new content offerings. That is 5 a month, that is more the 40th anniversary of Title IX, FiveThirtyEight, Nate Silver's New Data Journalism site, the Paul Finebaum Radio Show as well as Colin Coward's new Sunday morning football show. This relentless innovation creates surprise, delight and engagement among fans, and we hope dazes and confuses our competitors. This coming December, we will introduce a spectacular And this is truly the last great national championship and is a championship within the sport, which is now clearly the 2nd most popular sport in United States. I think it's clear that players can dance and coaches cannot dance.
As you saw before, we have long term agreements with the 5 major conferences. Only ESPN is in business with all of them. These 5 conferences create a national footprint. The ACC in the Southeast and Mid Atlantic, the Big 10 in the Midwest, the Big 12 in the Southwest, the Pac-twelve in the Coast and of course, the SEC in the Southeast, again, the most fervent audience for college football in the country. You're going to hear later from Conley and Stephanie Druley about a new network dedicated to the SEC, which I think has a lot of potential for us.
These conference agreements provide with a very significant position in college football. Last year, we produced and aired 400 college football games, starting with 30 games on Labor Day weekend alone. Our competitors do about 4 games per week, of course, unless you are NBC, which apparently does half a game a week since the season is 14 weeks long. My math skills are on display there. This leadership position makes us the natural partner for the new national championship playoff in the college football ESPN in a finely calibrated and well executed strategy holds the rights to 33 of the 35 bowl games, allows us to start the season with Labor Day in those 30 games, run through the season with college game day to those 33 bowl games at the end and this wonderful new college football playoff at the end.
The guys running the prompter is completely Confused because that was not on there. As you can see on this slide, and I want to point out one thing just for the sake of accuracy, these are the Sponsors from last year's bowls. We find out in the course of doing this presentation, there is no way to get a logo that doesn't have the sponsor embedded on it. CUSTEDO's will not allow there to be Fiesta Bowl without that. We're in the process of renewing some of these and replacing some of these.
There will be 3 games on New Year's Eve, 3 games on New Year's Day. It's clearly these 6 games are going to dominate that national holiday of bringing in the New Year, New Year's Eve, New Year's Day, that this followed a week later by the new national championship game, and all of this is going to be ESPN. This national championship game is clearly destined to be the 2nd most important day in the sports calendar after the Super Bowl, and it's all on about live events, our preeminent news and information program, SportsCenter, that full array of studio shows you saw across all sports, The multi platform approach to distributing all this content, our commitment to continuous adoption of new technologies and relentless innovation, It leaves out only one crucial ingredient that our guys are great at and that you see every day on ESPN, and that is superior storytelling suffused with passion and humanity. And I want to leave you with a little taste of this with from a 22 minute Emmy Award nominated SportsCenter segment about a lovely former ESPN producer named profoundly moving and a testament to the resilience of the human spirit and the redemptive power of sports.
Thank you.
In our job, we're always on the lookout for stories that are inspiring in nature. For people who have overcome something, just looking at the 2 of them, You knew they overcame something.
That's X, Y. That's all I did the whole time I was in the hospital.
Why?
How would you describe Your ability to see.
From where I'm sitting, I can just barely make out your facial features.
How far away am I
from 4 or 5 feet, something like that.
You can't go into environments like this and earn the trust of 2 boys like this Who have needs like this And then just walk away I mean, I don't think anyone would do that, really I'm not gonna be next on that list of people to break their chairs.
I work on with you.
Yeah. Keep moving. Don't stop moving. Yes, sir. Turn it.
Turn it. Yeah.
One more.
Okay. Stick to the plan.
You're amazing. Absolutely.
This is Dartanian, Dude, that I met in high school, wrestle big.
And
she just created the family. Like, she was the missing piece to the family.
I have to tell you the full 22 minute piece is amazing. And I'm guessing some folks in the room haven't seen it. So when you come back from the tour, we're going to put a copy on everyone's You can watch it on your way home tonight or at your leisure. It's really powerful and quite emotional. Senior Vice President of SportsCenter and News.
Now I don't know this for sure, but when I was preparing, I looked at his slide. I'm sensing he's from D. C, it's just a guess. John Cozner has been with ESPN for 17 years. He's our Executive Vice President of ESPN Digital and Print Media.
I'm in this role, John, among other things, is responsible for ESPN3 and Watch ESPN. So with that, let me welcome John, Rob and John to the stage.
Thanks, Lowell.
Thank you, Lowell, and again, welcome to ESPN, As Lowell said, my career with the company began 33 years ago after I graduated from Syracuse University. And to this day, Still in pain over the Orange's late season basketball collapse and early defections to the NBA. Now, when I started here, one small building housed all our production and business facilities and that building was supplemented by numerous trailers that served as an office for other departments. It's been a and honor to witness the growth of ESPN firsthand. The one common thread through those 33 years is the word passion.
Our passion for
I'd rather have the 6th team play Toronto than the 5th team play Chicago, but that's just how it turned out. I'm a graduate of Division III Wesleyan University, nearby town, Connecticut, where in 1982, I became only the 2nd Wesleyan Cardinal in school history to dunk in a game. And if you went to Williams, I dumped on you too. If you went to Amherst, you dumped on me. Shortly, Hannah Storm is gonna
going to come back here and she's going to walk you through the power of
SportsCenter and give you an inside look at the next generation of SportsCenter.
Hi, I'm John Cozner. I'm a New Yorker and I've been with ESPN for 17 years. I'm a Stanford graduate and was a sports columnist at the Stanford Daily when John Elway was our quarterback. In my 17 years at ESPN, I've learned something important. Never underestimate the level of passion and interest of sports especially when you can deliver exactly and everything that they want.
After you hear from Hannah, Mike Tirico will tell you more about the digital revolution at ESPN and give you a unique tutorial on all of our digital platforms.
Now back in the day when I started Any live event was considered a big event for us. And in 1980, we never dreamed ESPN would be home to the major events that we carry We love big events and cover them on a scale and scope that is unique in this industry. And to give you an inside look on how we cover, A major event. It's my pleasure to introduce the voice of Thursday College Football and College Basketball Game Day, Rees Davis.
John, thank you very much. A lot of handshakes to go around for all the executives there. You know, sports is my job and I feel as if I never go to Activity of being a fan. Therefore, I don't want to put my favorite teams up on the screen because money is my passion. Thought it'd be helpful for all of you now to see all of my favorite Wall Street firms up on the screen rather than my favorite sports teams and conspicuous by its My very good friends at JP Morgan, who I did want to include, but there is that matter of the credit balance on my expired corporate credit card that is yet to arrive at my house.
So, once you get there, then maybe we can make some adjustments on the top 3. Earlier during the program, John Skipper walked you through our vast portfolio of rights, and now we want to show you how we take those rights, along with our Find ESPN. College basketball season just wrapped up, and it turns out that there are close to 9,000,000 Duke fans and more than 6,000,000 North Carolina fans in this country. But you might have figured out by now, we have 2 of the most rabid of each of those fan bases, each of those constituencies Here in the crown, John Skipper, North Carolina Tar Heel, Lowell Singer, Duke Blue Devil. Since John's the boss, go Heels, John.
No heels. There you go. Last month, ESPN aired our 48 Duke, North Carolina game, which many of know is the fiercest rivalry in college basketball, and some would say, the most fierce rivalry in all of sports. And as you've heard many times already, we ESPN thrive on the big event. It's not just the event itself, though, it's the build up, it's the sports center hype, it's the radio talk, the second screen experience, the digital, the mobile, and all of the post game coverage.
Nobody is better at making an event feel big than ESPN. And to show you just how We roll with big events. Here are Wendy Nicks and South Palantonio.
It's Friday morning. It's all quiet right now. In about 24 hours, it's going to be crazy.
The importance of this game can be felt far past Durham. You can feel it on that. Hashtags, the handles, and of course, the radio waves.
Tomorrow night on ESPN, we got Carolina at Duke. And joining us now is our friend Roy Williams.
Carolina is not very talented.
Oh, I disagree.
You like him. You like Carolina.
Coverage is underway in Bristol, Sal. What's going on down there?
Hear the production meeting is going on. Reese Davis, Jalen Rose and the guys are inside.
I guess a question around the bracket. You guys can go anywhere you want there.
What are
some of the ways that You serve the ESPN
viewers. We do probably 5 or 6 segments today that go to ESPN for SportsCenter, ESPN News, Longhorn Network, espn.com.
Crews are shutting it down for the night. Tomorrow will be an early and long day.
What's your biggest challenge?
My biggest challenge is dealing with bigger felts. Really?
College game day will be on for 2 straight hours beginning 10 AM on ESPNU, then at 11 AM on ESPN. But before the show starts, Jay Bilas will hit the airwaves It's all morning long providing segments for SportsCenter.
Marcus Paige has had a player of the year caliber season in ACC play. So we want to know what you think. Tweet us take using the hashtag
UNC or Duke. We asked you on Twitter, 58% of the voters think that UNC is going to win tonight.
I don't think they agree
And Reese Davis.
Mister Palantonio, here's your coffee, sir.
Oh, thank you. Now if I take a car clean,
can I then go to the game tonight?
Well, you know, it's not up to me. It's up to my frac committee. What do you guys think? Hey, if there's one person who defines this rivalry, it's tick by tab.
I've done every Duke Carolina game that's ever been on ESPN.
Wendy, how are the final preparations coming in Bristol?
Next up is the 11 o'clock Sports center staff meeting. That's where they go over the game plan for the sports center that directly follows the game.
We
also have Dan with social media.
Tell us a
little bit more what we have We
have Tim Dwight at the game, and he's got a pair of glasses that have a camera embedded in them. So we're getting some pretty cool footage so far that could probably
Welcome to Cameron. Dan Schulman, Dick Vitale, Jay Bill. This is simple. This is about Duke and Carolina. Underway here to Cameron.
Didn't stop it.
On Xbox 1 and Xbox 360, you can watch ESPN Video Highlights. You can watch the live linear ESPN Networks. I
don't think John will. Are you
watch the game tonight. But just in case you can't, not to worry, we'll
Welcome to this most live edition of SportsCenter. Let's get to the highlight really quick.
Roll 25, take In
Final score, Duke wins. Let's head back to Durham.
76 to South.
Jed, they're absolutely sensational offensively.
They did a really good job at driving The ball, they isolated Parker at
the elbow. It was a freshman who stole the show. Back to the studio.
Number 5, Jim, is out of nuclear.
The battle for Tobacco Road between North Carolina and Duke is over, and so is nearly 40 hours of wall to wall coverage
Seriously? I did not know that you were an early pioneer of the Google Glasses. There was a stick Going under, but I will say this, Lowell met his lovely wife while a student at Duke, correct? And she said, Lowell, if I can quote you, yeah, you're the kind of guy Duke I But I'm delighted it worked out for you very well. And by the way, if we haven't picked on Lowell enough, you might have heard Mr.
Vitale during That taped piece saying, will this be Jabari Parker's last game at Duke? Yes. Jabari Parker is entering the NBA in ESPN history belong to Carolina Duke, including the most viewed regular season men's college basketball game. But one of the beauties and one The great things about ESPN is once that gigantic huge event is over, we just flip the page to the next. And now for a little broader view of the Sheer volume of content on ESPN.
Here are the hosts of ESPN 2's hit show Numbers Never Lie, Jamelle Hill and Michael Remarkable, mind blowing numbers. And as John Skipper alluded to earlier, we broadcast more than 400 college football games, which totaled about 1400 hours of live college football this past fall. And that doesn't include the 3 hours of college game day each Saturday morning. The backbone of game day for more than 25 years has been Lee Corso. Coach Corso's showmanship and credibility is a huge part of why it is so popular, and there is no one in the sport who has done more to increase popularity of college football and Coach Corso, who also happens to be responsible for one of those truly, no, I'm not making you another pancake right now, Stop hitting your brother, turn up the volume, hand me the remote.
I got to see what Coach Corso is going to do. One of the must see moments every Sunshine Scooter, the eternal optimist. Never thought I'd see the day where Corso Invades Wall Street, that is probably a scary thought to some of you. I know that we have a lot of college football fans in this room, or at We should. Anybody in this room have any idea which school's mascot head we just used for that piece?
Business. You can't predict the plot or time the last or script to finish. And while the seasons may end, the stories never do. 1 heroes,
We're going to believe in villains. Yes.
New villains. Got it. Wanna be moved or stunned or thrilled? Unbelievable Exasperated or exhilarated, overcome or overjoyed. Not all that too.
It's all part of our business where the office is the arena and the meetings are in stadiums and the customers have plenty of state. Sports deliver more than we can imagine, more often. Have a magical day. Oh, we are. And we'll deliver our wonders to you.
The next day, the next month, the next year. And when the game clock hits 0, don't worry. SportsCenter is next. It's a SportsCenter
Nope. Never going to work, Ron. Never going to happen. Although if I were Ron Burgundy, I might look to lay low for a while, safe house or relative perhaps, while he recovers with his image. I hope there are no portfolio managers in here who are following the Ron Burgundy Stock Pick.
And as you well know, Ron turned out to be very, very wrong. Back in 1979, a lot of people said that. They've been wrong from that time forward. SportsCenter has become the flagship program of ESPN. And from Ron Burgundy, who once said of himself, I'm kind of a Deal to someone who really is a very big deal, the one and only Hannah Storm.
Hannah?
Nice intro. Thanks for the intro. I can't believe what he did to my Notre Dame fighting Irish. Hi, everybody. Great to have you in Bristol and great to be Today in Digital Center 2, which next month becomes the new home of SportsCenter and we are very excited about it.
Shortly, you're going to finally get to get SportsCenter really enjoys a special place in the hearts and the minds of our fans. And you've heard some of the Our customizable mix of video, news, information, scores and of course statistics. You can see from the chart that SportsCenter reaches A young, affluent, male, multicultural audience, which as you know, advertisers absolutely love. The median age of the sports center audience is 35. That's compared to 47 for the average U.
S. TV audience. Men 18 to 34 represent 32 percent, almost a third of SportsCenter's audience. That's compared to just 8% of the average U. S.
Television audience. And the median income of Sports Center Audiences is $63,300 a year, 30% higher than the average U. S. TV audience, yes, pretty impressive, pretty incredible. And later today, you're going to learn about the importance of these demographics when Ed always a highlight, speaks with you about advertising strategy.
Now the power of SportsCenter is tangible. This is my favorite. If SportsCenter were a cable network, it would be the 5th most watched network, just SportsCenter, among men 18 to 34 and it would trail not only the aforementioned ESPN, also Cartoon Network, Comedy Central, and TBS. That's pretty remarkable when you and the most important news and information program for all sports. ESPN's total day rating is a 0.9.
SportsCenter alone than SportsCenter's ratings all alone. And their numbers include live games as well as news and information, so it's not just studio. Fans overwhelmingly prefer our multiplatform sports offerings and SportsCenter. And this is what we found really interesting. I'm going to give you a couple of examples over the course of the last year that even when an event airs on another network, fans tune into SportsCenter afterwards.
They want to see our post game coverage. Okay. After Fox's October 30th broadcast of the final game of the World Series, viewers chose ESPN over Fox Sports 1. ESPN's live postgame sportscenter had 9 times the viewership of Fox Sports 1 in the exact same time slot. And then following Fox's broadcast of the Super Bowl, fans once again tuned To ESPN for post game coverage, even though, of course, all during the Super Bowl, they had been promoting Fox Sports 1, ESPN's viewership was almost 8 times larger than Fox Sports Live's viewership in this time period.
So No one else has the equity with fans that SportsCenter enjoys. And regardless of where or when an event happens, fans, they make their way to SportsCenter every day. That is more people than tune in to The Colbert Report, The Daily Show, Morning Joe and Fox and Friends in 2013. And just to try to break down these numbers again because $62,000,000,000 is virtually incomprehensible unless you calculate What it means, it's like each one of you, every investor in this room watching SportsCenter for the next 11 80 years continuously. Well, I hope that demonstrates the power of SportsCenter.
We are not resting on our laurels. As I mentioned, next month we're going to move SportsCenter into a new studio and that's going to really allow us to take SportsCenter into a new era. Really, it's revolutionary in terms of sports studio television. And so, here you go. This is what you're going to see in a few minutes, but a sneak peek at what that studio is going to do for us.
Okay. It's very cool. You guys are going to go in there. You're not going to believe how big it is. There's a monitor on the floor.
There's A huge track up above for a gym camera and I know none of this probably is exciting in your world, but in our world, it's absolutely incredible. We're going to have so much fun with Our viewers have never seen anything like it and the possibilities are absolutely endless and we start rehearsals in there next week. Everybody is very fired up. I understand Also that earlier today, a couple of you guys tested your knowledge with an ESPN Sports quiz. I have the results.
They've been tallied. The 2 most Good. Okay. Guys, listen, it's a piece of cake. It's so easy.
You won't have any problems at all. Just sit in our chairs Harrison, talk off the top of your head. See what it's like to anchor a SportsCenter segment. It's a lot of fun. I want to see the tape afterwards.
All right. So I promise you all You're going to have a great time when you break for the tour. Meet us in the back of the room. And here to tell you more now before you go about the digital Revolution at ESPN. Here is my very tech savvy, peripatetic colleague.
He's everywhere and he's got his devices with him at all times. Mike Tirico.
Thank you, Hannah, very much.
Appreciate it.
Good to see you. Hello, everyone. Phil and John, congratulations. Look forward to seeing you guys do SportsCenter. The job trading thing probably Really cool advanced aspects of that new SportsCenter studio that you'll tour in a little bit, the ability to integrate SportsCenter and the SportsCenter app and social Media.
Now my role is calling Monday Night Football games, doing play by play, NBA Basketball, anchoring events like the Masters or the U. S. So it's vitally important that I get up to date sports information and stay up to date during those games. So at any moment, I could be on a number devices, iPhone, iPad, etcetera, just like all of us are seemingly every moment of the day. And fortunately or unfortunately, A camera caught me in the act yesterday on my journey here to Bristol.
So let's take a look. And that concludes my acting career. So I will not be changing jobs. I don't know if you know, but that was actually in my house. You could see because was a fire detector, a smoke detector that was not properly working.
It was hanging from the ceiling. So my wife will be telling me about that when I get home. So Tech savvy? Yes. Handy?
No. Since its inception as the first sports website in 1995, ESPN has really blazed a trail in the digital content and technology department, enabling fans to get their sports information anytime, anywhere on their favorite screen. What it's become really is America's current sports page. For fans, ESPN's the primary digital setting such that our biggest traffic rights. Now over the last half decade, we've committed ourselves to a singular product vision, focusing on serving sports fans wherever they are and making Mobile, really our winning advantage.
At work, espn.com is the TV set for millions of sports fans, offering them instant updates, breaking Amazon. So you're going for coffee at Starbucks. Well, the SportsCenter app, it's perfect. Lightning fast way to get scores, read a quick article or share an interesting post as we were doing I stopped for coffee. On the go, ESPN comes to you through alerts.
Among media companies, ESPN has unprecedented scale in notifications. So Let's say you're in your car, espnradio.com is going to bring you all of ESPN's linear programs, Best ofs and the largest selection of sports podcasts on the planet such as Bill Simmons' BS report. And if you're the Tigers Cy Young Award winner Max Scherzer, you happen to At a friend's wedding reception, the game's right there with watch ESPN on your phone. Some of you may have done that at a wedding. I would suggest doing with a friend makes the car ride home a bit easier.
Audience data bears out our remarkable growth over the past 5 years. Check out these Number of monthly visitors has tripled. Number of total visits up 5 times. Total monthly minutes increasing 6 fold. And we're rapidly extending that lead.
Let's talk about monthly unique visitors for a minute. 5 years ago, we were second to Yahoo! Today, we're number 1. Back to monthly total visits. We have added 8 SharePoints and again have overtaken Yahoo!
And in total monthly minutes, we are up 13 share points to once again take the number one position like all those number And a significant shift has occurred because for the first time, ESPN's mobile usage now exceeds that of desktop usage. It's a result of not only ESPN creating experiences for fans everywhere, but really a testament to having those great products like Watch SportsCenter and Fantasy Football or Baseball available on all screens. It's good news for us because it enables marketers to reach young minute audience by 2,009, we surpassed them to become number 1. We've extended our lead to the point that by January Our average minute audience exceeded that of the number 2, 3, and 4 players combined. If there were ever a day where you needed all these apps and second screen experiences, I've got one for you.
It's Thursday, June 12, just a couple of months All in one day, I'll be in Rio with the rest of our team getting set for the opening day of the World Cup Soccer Tournament. We'll also be airing the 1st day of the U. Open golf championship at Pinehurst in North Carolina. And on ABC, they'll be airing Game 4 of the NBA finals likely in Miami. On that day, like every other day around this place, SportsCenter will act as the hub in and around all of these huge events, keeping everyone connected.
You've seen a lot about how we produce our content, how we distribute to a multitude of platforms. And you can To make this happen, you need cutting edge transformative technology. I'd love to tell you all about it, but as you've seen, I can't act. So while I use these devices, I don't know how to make them work. So for that, let me introduce Aaron Laberge.
He is our Senior Vice President of Technology and Product Development. He will help us out with
Thanks for that, Mr.
Mike. Hello, Eric. I'm sorry, it's the tech savvy way to say hi. I'm not hip and young like you are. Thank you.
Good to have you with us.
Good, good. As you can see
on the screen behind me, I am a proud South Carolina Gamecock. I've been with ESPN since 1997 and I helped to launch and build the first version of espn.com.
So, we owe a thank you to you. We just showed what a day in the life of content looks here at ESPN. But we all do know that making great content is just not possible without the technology. So Aaron, maybe you can Shed some light, tell us a little bit about technology's role here at ESPN.
Sure. It's pretty simple. ESPN lives at the intersection of content and technology. They are inextricably into everything that we do and we have been at the forefront of innovation since 1979.
Now let's dive in a little bit deeper and talk about innovation and something that's near and dear to heart and for most of you who are football fans, near and dear to your heart as well, that yellow line, the first in ten line we'd like to call it.
Sure. We debuted during an telecast between the Cincinnati Bengals and Baltimore Ravens in 1998. And today, it is still a perfect example of how we combine content and technology to the fans experience.
It's a must have. Now it's hard to imagine watching any football game without seeing that yellow line that we debuted back in 'ninety eight. Let's talk for second about another game changing technological innovation really and that's ESPN HD. Sure.
In 2003, high definition television was in its infancy, yet anticipating its importance, we made the decision to design our first digital center as one of the world's first HD production facilities.
It's beautiful. It's turned out that that ESPN has been really credited with being the driving force behind the widespread adoption of HD. And the consumer The electronics industry has stated several times different places that ESPN made the move to HD. When that happened, it was a real tipping point for the whole
Logical capabilities allow us to process information at a speed and volume unmatched in the industry. As an example, let's take something we've all done Filling out our NCAA bracket. ESPN's tournament challenge generated over 11,000,000 brackets and at our peak we were processing over 200 example of how we consider technology to be product at ESPN.
More Duke mentions, Lowell. We continue to go down a certain road here. And by the way, thank you for using my bracket because I had Connecticut in the finals, the 8th straight year that I've had the finals picked exactly right. Sure. Now, Digital Center 1 and where we are, Digital and print across more than 50 ESPN Business Entities.
So DC 1 and 2, as we like to refer to them as, really enable our media businesses to collaborate for the benefit of fans in powerful ways that no one else can, not just here, but globally. So can you tell us about some of the other benefits of DC1 and DC2?
Sure. Our digital centers allow us to own live. We record over 95,000 live feeds per year, which translates into over 500,000 hours of content. And the second the live event concludes, we take the fan experience to another level. We published over 30,000 video last year.
Those clips were watched over 2,500,000,000 times and generated over 3,000,000,000 advertising starts.
How's that for
Before you do that, I can give some perspective at least to these numbers that you clued me in on to be candid. If someone in this room were to sit in front of a TV for 57 consecutive years, then you could watch all those It connects Bristol to New York, Los Angeles,
92 terabits per second.
Which I know is the equivalent. Trust me, I have this off the top of my head. Moving 60,000 high definition sporting events simultaneously. It's all incredible stuff. To say, we are in a state of the art building and facility, and Aaron's a big part of it.
Aaron, thank you very much. Thank you, Mike.
Appreciate it.
It's clear technology is one of the key components of ESPN's leadership. And you will all now have a chance to see firsthand what we're talking about on a tour of DC-one and DC-two. I'm now going to ask Lowell back up here to walk you through the logistics of your road trip. Thanks for your time. Enjoy the rest of your time in Bristol.
Thanks,
Mike and Aaron. I hope that presentation gave everyone a sense of why the content we produce here every day and the technology that powers that is really unrivaled. So we're now going to break to tour our current and new digital centers. For those listening on the webcast, we are break now. We will reconvene in about an hour, close to 3:30, so please rejoin us then.
So let me go through some logistics. 1st, Phil
Gun drill with the wind.
Does anybody have any other ideas?
Oh, oh, it's about getting the Muppets back together again to stop an
I don't think Americans watch subtitled films.
How about a movie where you don't make a
He sees something you should never have seen
and he has to live with a terrible secret.
That sounds a little dark, Rolfe.
The window is open, so is that door. I didn't know they did that anymore. Who knew we owned a 1,000 salad For years, I've roamed and e halled. Oh, I have a ballroom with no balls. Finally, they're opening Not the game.
There'll be actual real life people. It'll be totally strange. Don't know if I'm elated or gassy, but I'm somewhere in the zone. But then we laugh and talk all evening, which is totally bizarre. Nothing like the life I've
left so far for the first time in
And I know it is totally crazy to dream I'd find Romeo for the first time in
Your clothes
Baby, when they look up at the sky, we'll be shooting stars just passing by.
It is, as we said, the highest rated Studio Show in the history of Sports Television, Daily Show. The guys are terrific and Tony will be here this evening. I hope you had a good time on the tour In the world's largest studio, welcome back. I hope you've gotten the sense that we do think of Bristol, Connecticut As the center of the sports world, but Connecticut was the center of the sports world for another reason last week, which is Men's and the women's teams both won the national championship. We sometimes think of ourselves almost without peer in the state of Connecticut, but 877 wins and 133 losses.
This is the kind of record we like at ESPN. I'd like you to welcome Gina Auriemma, the coach of the women's team at the University of Connecticut and our next door neighbor. Good to see you.
Nice to see you.
We'll be more comfortable.
Thank you.
And Gino is going to be happy because I'm only going to ask him one question. Congratulations, Gino. You now have 9 national championships. One more than the great Pat Summitt, one less than the great John Wooden. And I'd like you just to talk for Couple minutes about the pursuit of excellence over an extended period of time.
You won 9 championships in 19 years. That's a remarkable accomplishment. How do you do it?
Watching PTI
all
the time.
Okay. It's only been on 15.
That's right.
The first 4 years you were on your
That you all probably already deal with every day is, I don't recruit bad people. I don't have a lot of skills in my skill set. But one that I do have is It doesn't take me very long to figure out whether I want to coach somebody or not. And it has nothing to do with how good a player They are. And I think you do too.
I think you sit across the table from somebody and in about 30 seconds, 45 seconds, you know exactly whether you want to work with that person You don't. You may have to. And you might convince yourself that it's a good idea because they're going to make you a lot of money. But deep in your heart, you So whether that's somebody you want to spend time with or not. So I try never, never.
I try not to bring people into my that I don't think I can work with and I don't think are great people that are going to get better. So we start out with that. And then there's a limit to what people think they can do, and they set their own limits. And that's another thing that I'm really good at getting people to do things that I never felt like doing when I was their age. I'm not exactly a plan guy.
I don't really Get into like 5 years from now, 10 years from now, whatever. But I think I know what makes people better. And I work really hard with my staff at making them better. So we have kind of a formal kind of a structure. I coach my the difference between right and wrong.
In today's world, if you show up, you get a gold star. If you You jog, people say, Good job. You're really running hard. And if you run, they think you're sprinting. So we try to teach them the difference Between walking, jogging, running, and sprinting.
And they get rewarded when they sprint. And when they walk, they get something less than And they're used to that because when you have good parents, they've taught you that as you've grown up, when you do this, you get rewarded. When you this, you do not. And we just try to tap into that. And plus, we recruit the best players in America.
Who are great people?
Who are really great people, Those of you that are basketball fans, no coach has ever won championships, coaching mediocre players. I don't I don't care if you're coaching the Yankees or if you're coaching UConn women's basketball. If you coach the best players who happen to be the best people, then you have a chance to win I just saw something today that I thought you'd be interested in. Take a guess who the least find, The NBA does a list at the end of the year, which players position and which teams Had to pay the most fines for bad behavior in the NBA during the past year. Take a guess which team Some teams, the New York Knicks, paid $450,000 in fines this year.
One team paid $14,000 in fines this year. 1 team is San Antonio and one team is the New York Knicks. One team has the best record in the NBA. The other team is not playing in the playoffs. And it's not all about talent.
It's about getting the right people in organization.
We have certainly done that. Gino is a great neighbor of ours. He's been a great friend of ESPN's. He came by today to say hello despite a very busy schedule Last week, I want to thank you for coming by to see us.
Well, I heard today was a big day out here, that this doesn't happen very often. I'm glad you know now you don't need a passport or visa to get to Bristol. So hopefully you'll make another trip out here in the near future. And John is one of my favorite people and I've known him long before he got to the position he's in and he's one of the good people and that's how So I want to live. I want to spend all my time with really good people and John is certainly one of them.
Thank you. I appreciate that. Thank you for calling.
That was great. Thanks to Coach Auriemma for taking the time and coming over this afternoon. I thought that would be a great moment for everyone. So hope everyone enjoyed their tour, got a is refreshed because we're in the home stretch now. And after spending the morning talking about how we buy and utilize rights, we want to Switch gears and now for the rest of the afternoon, we want to talk about how we generate financial returns.
And there's no better place to start than our compelling distribution story. And Sean Bratches, as Executive Vice President of sales and marketing at ESPN has led the negotiation for the most important deals we've done over the last two Sean's been with ESPN for 25 years. He, on top of affiliate sales, is in charge of advertising sales and research. He a big portfolio, and I'm really delighted to welcome him to the stage right now to walk through our distribution story. Sean Branches.
Walt, thank you. Hello, and once again, thank you for joining us here in Bristol for Disney Investor Day at ESPN, a little home field advantage for us. I started my career here over 25 years ago, many of those spent here on campus, and it continues to evolve to represent the great and innovative culture of this company. I'm here to talk to you about our distribution revenue, our largest source of our industry leading rates. When considering National Networks by Programming Group, according to Kagan, our networks clearly hold the leadership we had with operators in the early days of my career to simply launch ESPN on their 35 channel cable systems.
Now, ESPN is the centerpiece of our distributors' core basic cable business and commands the highest rates in the marketplace. None of this happened overnight. It's taken us 35 years to get here. So how do we become a marketplace Leader, while ratings are important, we believe the key to success lies in the indispensability of a network to its audience. When you get down to brass tacks, there is no more important network on pay television than ESPN.
Part of our indispensability is the power of the genre in which we toil, sports. Sports is the last bastion of live viewing. As Artie said earlier, 96% of ESPN's viewing is done live. It's the only content that day in and day out is part of the immediate social currency. Our collection of exclusive events has grown steadily over the years.
Over the past decade, we've moved numerous marquee events from broadcast to cable, including Monday Night Football, the new College Football Playoff, U. S. Open Tennis, Wimbledon and The Open Championship. For our distribution partners, The fact that our expansive portfolio of rights resides on paid television drives tremendous value as it creates greater demand for their We evaluate how well we're serving sports fans by asking 2 very critical questions. First, how much would our fans miss us if we were not part of their multi channel subscription?
And secondly, would they change providers if our networks were not available. According to our ongoing studies with Heart Research, ESPN Networks are the number one reason that people subscribe to pay television and more subscribers would change TV providers if we were not available than would do so for any other that work. Indispensibility is absolutely paramount to distribution value, ahead of ratings and other metrics that are cited in the media. Core to our success is our ability to maintain strong relationships with our distribution partners and support their businesses. As John Skipper mentioned earlier, ESPN Beta Research ranked ESPN the number one most important network in cable for the 10th straight year.
And it doesn't stop at video service. ESPN is also critical to selling advanced services. Our viewers are higher income earners and more likely to buy critical growth products for MVPDs such as HD, DVR and high speed data services. ESPN also ranked number 1 for the 10th straight year as the network with the most valuable programming to help generate local ad sales revenue. ESPN has the best affiliate sales group in the marketplace, period.
We've completed 8 out of 10 long term renewals with the largest operators in the marketplace. All of these deals were done without a service disruption. We negotiate in executive suite rather than the press. Distributors have made long term investments in us and on this business model, evidenced by the recent deal we completed with Dish Network. These long term deals have secured the framework of the multichannel bundle well into the next decade.
We're focused not only sustaining the value of ESPN, but on positioning it for the Future. This industry is changing faster than ever before, and that creates extraordinary opportunities for established brands such as ours. We're well positioned to capitalize on these new opportunities, largely due to our long standing culture of innovation. ESPN is always at the forefront of developing and exploiting technology. I'd like to discuss 3 significant ESPN innovations.
With WatchESPN, we became the 1st linear network to stream live content on an authenticated basis. The evolution of Watch on Xbox is also a great example of our continuing to innovate. Sports, like no other genre, is positioned to take advantage of the capabilities of new platforms like Xbox. The interactive channel guide allows subscribers to curate specific content into channels, such as watch live sports highlights while playing highlights to the side of the main engagement screen. And a sure favorite among active gamers is Snap Mode, which gives fans the ability to watch ESPN video content on screen while gaming.
These innovations capabilities of the Xbox platform drive usage 46% higher for the key 18 and over demographic than on traditional multichannel platforms. While driving revenue growth for ESPN and our distribution partners. ESPN3, our flagship dual revenue stream broadband network, like NCAA Football and Basketball, Cricket, International Soccer and my personal favorite, Collegiate Lacrosse. ESPN3 has supported the value proposition of high speed data for over a decade, but as screens converge, we're working with our distribution partners and exploiting to also take ESPN 3 content
to the
television. It's critical for us that we remain at the forefront of emerging platforms and that we work to establish business models that make sense for us and our partners. Among our biggest announcements in 2014 was the new personal subscription service that we developed with DISH Network. This is a product we will be targeting to the younger demographic that is part of the 7 broadband only homes in the marketplace. We expect the personal subscription service to be service rather than a vehicle to exit traditional pay television subscription.
You've heard what I've had to say about our leadership position in the market and our indispensability and value to affiliates. But don't just take my word for it. I had the opportunity to speak with the President of Cox Cable, Pat Esser, in his office in Atlanta recently and asked him to share his thoughts. So let's roll that tape. So as we look to the future, we will continue to marry innovation with sound business strategies.
It's imperative that we retain our leadership position with fans and distributors. We'll continue to embrace innovation in order to position ourselves for the future, touching more sports fans each day, wherever, whenever and however they want our content. Thank you very much, and I look forward to seeing all of you at dinner this evening.
Thanks, Sean. I hope that presentation does provide some insight in how well positioned we are with regard to this really important revenue stream. Now, there's another important revenue stream for us and that's advertising. Ed Earhart is the President of ESPN Global Marketing and Sales, a position he's held for 15 years. And I think you'll see that during Ed's leadership, ESPN's ad sales performance has been He's going to provide some insight in how we've accomplished what we've accomplished and why we remain the name that we remain with advertisers.
So with that, let me bring up Ed
Thank you, Lowell. It's great to be here with all of you. So as you can see, my 2 favorite teams are Nielsen and Close Games. So at customer marketing and sales, we use that name because we literally put our customers first in everything we do. From our relationships with the top CEOs and CMOs in the to our growth strategies and go to market communications, we lead with understanding our customers' needs.
Yes, we're selling advertising. We're also selling our customers products. And the more goods and services we move for them, the better it is for our business and for theirs. It's the heart of our competitive advantage. The proof, well, it's in the pudding.
Advertising represents a significant portion of ESPN's total revenue. And at ESPN, as you can see, we've outperformed the marketplace, whether it's the total media market, television market, sports Over the past 5 years, ESPN has outperformed in a big way. So how do we do this? We focus on the customer. At the highest levels, our customers consistently tell us there are 3 main areas of focus for their marketing success.
1st, increasing fragmentation of audiences, both within and across screens 2nd, ad model disruption, the result of time shifting, ad skipping and new content formats. And 3rd, macro demographic trends, specifically U. S. Hispanic growth and changing societal roles. We see opportunities, opportunities to accelerate revenue growth and widen our competitive advantage.
So let's take the first one, Audience fragmentation. As you've heard, ESPN's mission is to serve sports fans anytime, anywhere. To our customers, this means that ESPN is always on, across screens and at scale. Increasingly, time spent more screens throughout the day is a live experience, and it increases our revenue opportunities. Watching a live game on television, checking scores on a sports or app on your mobile phone or tracking your fantasy players on a tablet through game cast, these are all live experiences.
They're additive behaviors. So for ESPN, we're growing on all screens, not cannibalizing among screens. In this era of DVRs, binge viewing and time is to leverage the significant social buzz around real time events. And we program with that in mind. Advertisers is recognized that we're always on across screens and they reward us every $1 in every $4 that we write in advertising today is nonlinear.
Part of that revenue growth is fueled by the growth of WatchESPN, which Aaron and Sean mentioned. We pioneered Always On with our Watch product, and it's a new and different advertising stream. WatchESPN allows us to play in both the digital and the television marketplace. It's a unique stream with insertion. It allows us to garner, in many cases, CPMs that are often double Consumer purchase intent increases by up to 85%.
A good duo of that growth is now being fueled by the over the top devices, which are their age. Apple TV, Xbox, Roku and more. And ESPN is on every Not surprisingly, we're seeing that the WatchESPN audience is younger, more affluent, and more technologically savvy than both audience and ESPN's linear audience. And we believe as addressable data driven advertising picks up steam, WatchESPN is in an excellent position to take advantage of this opportunity and industry trend. This provides us another way to monetize our fans wherever they consume sports.
Among our advertisers who spend $2,000,000 or more, 80% buy ESPN on multiple screens, that's a 23% growth since 2009. As clients demand for more improved measurement, we think this will accelerate ESPN's ability to monetize all screens and widen our gap over our competitors. As Artie said, we're leading the industry to accurately count impressions across all devices. We're also investing in understanding consumer behavior on those screens. Marketers want to know how multi screen consumption impacts their advertising, something ESPN is uniquely positioned to do because of our scale.
Our clients come to us for expertise on which combination of screens, at what levels, and how they can drive specific results for their marketing goals, whether that be awareness, brand favorability, purchase in mobile. Currently, as you guys know, mobile is the platform that's the most challenged in terms of measurement. It's also the one, as the industry figure differentiates us and provides revenue upside. Our client's second challenge is the disruption of ad models. Being live, of course, very nature of sports blunts the time shifting and ad skipping.
But we don't rely solely on that to best serve our customers. Just as ESPN is always on, we're also always That innovation comes to life in 3 key areas. The first is breakthrough ad formats, which we're doing across every screen. In television, we recently created the transition unit between live events and sports center. This allows us to hold fans' attention to the advertising and helps increase ratings at the same In digital, we introduced the Flip unit, which was created at our own 2013 ad sales hackathon.
The ad flips back and forth between and content and keeps the user engaged and the advertising viewed. And in print, we launched a never been done before branded unit with Coors Light Cold Hard Facts, a television inspired idea. An industry first, it puts a print spin on branded content. Native advertising may be latest trend, but at ESPN, we've been doing native advertising for many years. The second way we innovate is through branded solutions fueled by Creative Works, our in house marketing agency.
These innovations create compelling ways to connect brands with our fans, and you know them well. They range from the highly successful game day built by the Home Depot, to the Nissan Heisman House and the Wendy's Wooden Award and so many more. These are IP free, co branded marketing Let's let the clients of Secharmen, Duracell, Toyota and Paramount to ask us to create their brand advertising, as they know we speak to men better than anyone. We're very proud of the branded content that we've done Clients such as this video series for Levi's, which stars the Super Bowl winning quarterback Russell Wilson. Take a look.
I do stupid things when it comes to love and evil.
Total distribution channels enable us to pioneer beyond our walls to engage consumers wherever are. Fans can watch ESPN Xbox, get instant replays from Twitter and watch ESPN Video on AOL. We regard social as an opportunity, not a threat. We use Twitter, for example, as a distribution channel for our highlights in partnership with Verizon, while still controlling the sales channel and connecting fans back to the scale of ESPN. So for us, social is complementary.
We do it well and we figured out how monetize it. Dunkin' Donuts partnered with us during the NFL season to run Vine Videos as billboards in Monday night countdown. This was the first ever television advertising made completely from Vine Videos. And the proof of how ESPN innovates in ad disruption is in our numbers. Because as you know, the numbers never lie.
Take a look at these numbers. 23,000 on air features With our customers' brands integrated into ESPN's content, 850 integrated sponsorships, that's scale. The biggest focus for our clients, which transcends their marketing and their media strategies, is the changing macro demographic trends that we see across America. We're ahead of this curve and we're well poised for growth. First of all, on the Hispanic front, ESPN De Portes has long been the product choice for targeting Hispanic sports fans.
And as you know, sports is the great unifier. As population growth and marketing budgets shift from Spanish to bicultural and English dominant Hispanics, demand for English language programs on ESPN will only increase. And we're bridging language and culture to better serve our fans and our customers. Moreover, young Hispanic men, greatly older index on mobile. So, there's a significant upside and leverage to our strength and scale in mobile for this market.
Our clients recognize our power here and use us to reach this growing population both English and in Spanish. For example, Toyota sponsored Sports Nation on ESPN and Nacion on ESPN Deportes. T Mobile partnered with our own creative works to do our first ever dual language co branded spa. The casting reflects the diversity of Another macro trend clients are embracing is the shifting role of men in society. More men are staying single And if and when they do marry, they're assuming nontraditional roles in the family.
Men are picking up more responsibility for childcare and grocery shopping, which increases their According to the National Retail Federation, men spend 39% more per visit than women around the holidays. This means men who have largely been ignored by spending categories such as fashion, retail and consumer packaged goods are now lucrative targets for a whole new group of advertisers. And those advertisers turn base. In 2,009, we had clients such as Gillette and Old Spice. Since then, the number of men's grooming brands on ESPN has increased by 75%.
2014, we carry advertising from all these brands. And this category has grown, and we're more than our fair share, as you would expect. However, what you might not expect is the growth in the retail category we're experiencing. As men's fashion becomes more mass and e commerce more popular, our retail business has grown 44% since 2,009. And ESPN now does business with retailers such as Macy's and Target, which traditionally had targeted women.
We have helped retailers such as Men's Wearhouse, Belk, Joseph A. Banks grow from regional to national players. And we're helping drive e commerce with all of these clients, as well as the companies like Overstock and Amazon. So at ESPN Customer Marketing and Sales, we're optimistic about future growth. All the winds of change blowing across the marketing and media landscape play to our strength.
We have opportunities to compete in so many different marketplaces and across new and growing categories. And this leads to new advertisers. Across all media, ESPN signed 6.30 new advertisers in the last year. These new advertisers have an average spend of $200,000 So that gives us a lot of room to grow that business. This year, as John discussed earlier, we're bringing a very exciting product True vertical partnerships that are season and year long with some of the very biggest brands around the College Football Playoffs.
Led by Doctor Pepper's recent announcement, ESPN has a dozen deals and counting to announce over the next 90 days. Clients like our college football partners recognize as ESPN strength. So don't take just our word for it. John Skipper mentioned the most recent beta research study, studies 225 Advertising Media Professionals, not surprisingly, ESPN was number 1 in all these areas, outranking 42 other cable media companies and all 4 broadcast networks. Over the past 3 years at our annual UPFRONT event in New Senior executives at leading companies have been gracious enough to talk on the record of how ESPN drives their business results.
And here's what just a few of them had to say. Love those cheesy guys. So to end, let's go back to where we started. It's about our customers being at the center of all we do. It drives our success not just for today, but for where we're going to go next.
Thanks.
Thanks, Ed. That was great. Thank you, Ed. I remember it was just a couple of years ago, we started talking about men's Grooming is a category and people would look at us funny. And it's become a real significant category for ESPN.
So I think that's a credit to Ed and his team and the work they're with clients. So we're often asked about our international business. And we've spoken little about this over the last 5 years, but not extensively. So we thought this is a great opportunity to dive in a little deeper. And here to take us through that is Russell Wolf, Executive Vice President and Managing Director of ESPN International.
He's going to talk about a few of our international initiatives. Russell has been with ESPN 17 years. He leads our efforts outside the United States, and I'm pleased to welcome him up right now. Russell Wolf?
Thanks, Paul. Good afternoon. I know getting towards the end of the day, so stick with us here. I'm Russell Wolf and I lead our businesses outside the United States. I'm excited to be here.
I've been at the company since 1997. And while I'm based New York today, I've had stints in Hong Kong and Singapore. I'm both a Dartmouth and Tuck School graduate. And while I spend about 50% of my time outside the United States busying with staff, our clients and rights holders, I still get a chance to play ice hockey when I'm home in New York with my men's league team, which is great. I cheer for the New York Rangers, as you can see, big game tonight against Philadelphia in the opening of the playoffs for them and a few other teams, which you may or may not recognize, including the Indian national team.
Over the last few years, we've made some moves that refined our international strategy and our portfolio. We're now focused on our multimedia businesses in Canada, Latin America, Australia, New Zealand and our digital businesses around the world. You'll hear a bit more about our strong digital presence in India in just a few minutes. As you can see from this next map, we have a very broad footprint. ESPN has a presence in almost every country around the in at least one media.
We have 24 television networks outside the United States that reach 162,000,000 households. These networks are complemented by more than 50 websites, mobile applications, radio, broadband and other magazine in key markets. Honing our strategy, we believe we're focusing our efforts on the TV markets and global digital spaces that have the best marketplace structures, dynamics and continued growth projections to continue to create profitable and growing ESPN businesses. ESPN International continues to grow and today the revenues in this business, including our joint ventures, which includes the Canadian business, are in excess of $1,000,000,000 per year. Today, we'd like to introduce you to 2 very specific businesses at ESPN and their growth dynamics.
Our Latin America business, which I'll get to in a few minutes. But first, let me introduce you to ESPN's multi regional cricket business, ESPN Cricinfo, the world's number one cricket Web an online cricket brand, which we acquired in 2007. Cricinfo provides the best cricket content in the world, whether that's Breaking news, statistics in a sport that has more statistics than baseball, detailed analysis or live match coverage. We're excited about the growth prospects of enabled phones or tablets and broadband and the immigration patterns right here of South Asians in the United States. Today, almost 30,000,000 Americans self as cricket fans, dollars 30,000,000 Product improvements on ESPN Cricket Info continue to deepen engagement with fans.
From 2,009 to 2013, we've seen Cricinfo grow 190% across the web, mobile and apps. And in March, the short form of The 2020 format had its World Cup in Bangladesh. And now the world awaits the 2015 ICC Cricket World Cup. This is cricket's equivalent of FIFA World Cup. We are well positioned to take advantage of the strong growth factors in the cricket business around the world.
And we expect the 15 World Cup to set an all record for Cricinfo. Now, I imagine most of you don't spend much time in the world of cricket like I do. So, I thought we'd take a minute to show you the world that Cricinfo plays it. It may not be where you spend your time, but last week we had 1st ever live cricket match on ESPN 2, the final of the Cricket T20 World Championship. For U.
S. Cricket fans, Cricinfo, and yes, there are U. S. Cricket fans, is about live cricket, including 125 match days under contract from key rights holders, whether the ICC, the Indian Premier League others. We've integrated, as you can see here, the ESPN 3 experience right onto the front page of quick info for U.
S. Fans. And it's working. We're growing usage. In December alone, we had 2,100,000 video starts on Cricinfo here in the United States.
The top 10 exclusive events on ESPN A product you've heard a lot about today are all cricket events. And we've just come off this great T20 event in Bangladesh. It was one of the best cricket tournaments we've ever aired on Watch ESPN and ESPN 3, and it ended up garnering the most uniques and highest minute average minute audience of any event on Watch in its history. And as I said, the final of this event also aired live on television on ESPN 2. The interesting thing about Cricinfo's fan base in the U.
S. Is it's mostly additive. 40% of Cricinfo users are not espn.com users. They're coming to our company for cricket. We're now preparing for employees to take advantage of the upcoming 2015 ICC World Cup.
In the U. S, where we have the TV rights, we'll air in full, and we will cover the event cover to cover, start to finish, digitally around the world. Now, Let me take you back from the world of cricket, down south to Latin America. As I introduce you to ESPN's Business in Latin America, you'll see that this landscape has many of the characteristics that the U. S.
Media landscape had 20 years ago, such as low and fast growing pay TV penetration, developing and fast growing TV ad sales marketplaces, emerging economies and rising middle classes and accelerating adoption of media technologies such broadband, mobile phones, HDTV and tablets. Let me tell you a little bit about how we think about Latin America. We've divided Latin America into
2 main regions, Spanish speaking Latin America
and Brazil, always into 2 main regions, Spanish speaking Latin America and Brazil, always shown in green. This division is driven primarily by Portuguese and Spanish language distinction between the 2. This business, which we first entered in 1994 has grown significantly over the years. And from 2,008 to 20 the operating income CAGR on the entire ESPN Latin America business has been 45%. This growth has been driven by 4 really important 1st, multi channel television household growth, then ESPN subscriber growth and subscriber fee rate increases, both achieved through negotiations with platforms and of course ad sales marketplace growth.
Over the past 5 years to continue to serve fans in these markets and take advantage of these we have launched 12 new products, networks and services in Latin America. With Spanish speaking Latin America, we further divided it into Latin North and Latin South, the North being anchored by Mexico and rounded out by Central America and the South being anchored by Argentina. The division is based primarily on fan avidity for various sports, with Mexico having more interest in U. S. Sports and the South having interest in rugby and polo.
But of course, in both places, soccer is wildly popular. We're focused on being pan regionally efficient and driving local appeal at the same time, whether in Brazil, Mexico or Argentina. As we've delivered fans great Multimedia content, we lead the industry in Latin America with a combination of technologically driven products, such as WatchESPN, piggybacking on the products and it leverages our U. S. Technology group and the investments we've made.
We're also replicating our very successful U. S. Sales strategies. 1st, the multimedia ad sales and sponsorship approach, which you heard about from Ed. Our sales team is both locally focused and part of our global customer sales and marketing organization.
Our global, regional and local capabilities allow us to sell to clients where they want to buy. On the distribution side of our business, which you heard about from Sean, we've modeled Disney ESPN Media Networks team after our joint U. S. Distribution team, which does an excellent job across the industry with Disney and ESPN products. We believe these four areas of leverage provide us smart, efficient and cutting edge products for and amazing approaches for clients, while positioning us for ongoing growth.
Let me take you into the region for a bit more detail, if you don't mind. As you look at Latin South, it's anchored by the TV networks listed above, ESPN, ESPN Mass, ESPN Trace and ESPN The ESPN Extra product is offered to cable operators around special events. These networks are complemented by ESPN Radio, espn dotcomand@espnplay, our broadband product in Latin America, which is just like ESPN 3 here in the U. S. Football is key to fans in the South and the Andean regions, and we have a very strong mix of products, including the UEFA Champions Spanish League and English Premier League.
Argentine rugby and Polo are wildly popular and have very strong appeal. We have an excellent rights position in these territories in rugby, polo and football. As we head north, we also have a suite of TV networks tailored for and complemented by multimedia offerings that you see here on the left. Football remains at the heart of our offering with the fans and the Champions League, Serie A are key. We also have a package of Mexican football in the mix, which of course is a fan favorite.
In Brazil, where football is king, we have a growing position in local Brazilian football here at Copacara do Brasil. We're expanding our presence in the under-twenty and under-seventeen product, which we were the first ones to ever launch and that's in addition to our position in the main Brazilian Football League. Brazilians are also everywhere in European football. Brazil is the number one exporter football talent to Europe, where 5 15 Brazilians currently play, making European football, of course, a Brazilian fan favorite. And to serve these fans, we have variety of European leagues that complement our Brazilian football efforts and that's headlined by the UEFA Champions League.
U. S. Sports are popular across The NBA works in almost all these markets. Major League Baseball has strong appeal in the Dominican Republic and elsewhere, and the NFL is highly popular Mexico. The offering of major golf and tennis events in the South is similar to the North and both hold really strong appeal.
Our Brazilian fans also love the Grand and majors and are offered the best of both throughout the year. Now, no matter which rights set we have in any market, ESPN is always focused not on the game, but also on the game around the game, which you've heard about today. The SportsCenter franchise, which you got a chance to tour, is at the heart of our news and information effort
SportsCenter in Latin America has the iconic look and feel of the sports center you know and love in the United States. From the day we launched our first Latin American In SportsCenter in 2000, the show's presence on our networks has grown from once a day to 6 different local versions produced at 3 different studios In Sao Paulo, Buenos Aires and Mexico City, over 10 hours of SportsCenter are produced daily for Latin American fans with contributions from around the globe. Produced locally but supported by an assignment desk and a global news gathering unit in Bristol, is authoritative and locally relevant. One day we are at the Champions League final in London and the next at a Copa Libertadores event In Brazil, the Super Bowl in the United States or at a polo match in Buenos Aires, SportsCenter is at
growing interest in sports, all sports, including products like the NFL, which had a record setting performance during the recent New York Super Bowl. The 2014 Super Bowl was up 60% to which we hold rights. The 2014 FIFA World Cup in Brazil and the 2016 Rio Olympics, which we're really excited about. The 2014 FIFA World Cup represents ESPN's most globally integrated production effort yet. Teams from TV, print, digital and side by side presenting the best coverage for our key markets.
The view on the right here is from our exclusive studio in Copacabana Beach in Rio. If any of you are in Rio during World Cup, we'd love to have you by for another studio tour. I hope you enjoyed the tour of our Latin America business from Mexico in the to Argentina and South. We believe we're poised for future growth and that there are some very key growth drivers in our corner. 1st and foremost, ESPN's brand strength.
Then the emerging middle class and economic expansion, multichannel TV penetration, where it is today and the growth potential it has, the ad sales marketplace development, which is ongoing, and technology adoption, such as broadband performance tablets. Of course, the growing popularity of all sports is behind us as well, and the U. S. Leagues are right there. We're excited about the future growth prospects around the world for ESPN.
Quick Info is just one and our multimedia approach in Latin America is another. They're good examples of why we think of ourselves not as a U. S. Media company, but as a global sports company serving fans around the world. I'd like to thank you all again for taking the time to come to Bristol, an interesting place to hear about the rest of the world.
Thank you.
Okay. Thanks, Russell. It struck me during Russell's presentation, Had we been thinking ahead, we would have planned this day for June in Rio, but instead you got April in Bristol. Okay. So while most of you are out touring, Our 2 lucky quiz winners got to film their SportsCenter highlight.
And now we're all going to get to see the results. So first, we're going to have Phil Revinsky. Phil, thank you for doing this. We appreciate it. As you see the clip, you are going to hear A producer in fills the air.
That's what he heard. He had 2 highlights. I think they're relatively straightforward. So let's take a look and listen. That was great.
Phil, that was great. I have to tell you that as part of a training program about 5 years ago, I had a chance to do that. And it is incredibly difficult to do. And that was super, Phil. So you might want to stick around after dinner.
There could be some work for you tonight. But look, here's the reality. It's not always so And things don't often go as we plan. Sometimes we veer off the script and sometimes things take a certain TV twist. So now we're going to take a look at John Marion, who had a situation that I'd say was moderately different from the one Phil faced.
And John, let's see how you handled it. We can roll that one. That was great. Thanks, And thanks, Phil, for doing that. And thanks to Lee Fitting, who was in his ear and having some fun, I could tell.
We'll make sure that you guys get copies of both of those. It'll be a memory To hold on to, that's fun. All right. For our last business presentation, we want to turn to our newest network, the SEC Network. And in a moment, you will hear from Justin Connolly.
Justin is the Senior Vice President for College Networks and he's leading the SEC Network. He's been with Walt Disney Company for 14 years and 11 of those at ESPN after a short stint in corporate working in our treasury group. Now, I realize that most people in the room don't live SEC country and don't regularly attend SEC football games. So before Justin comes out, we thought these spots might give you sense of the passion fans have for the SEC and why we are so excited about the launch of this network.
Good afternoon. 1 of ESPN's Hallmarks is building great creative campaigns. And we've done it once again there. What you just saw is a small sample of our SEC Network marketing campaign, which will ramp up in anticipation of the network launch on August 14, of 2014. We are inviting fans to take it all in, take in the magnificence, the spectacle, the satellite and telco partners on behalf of all of the Walt Disney Company Properties and ABC.
Now our crack investor relations team has done some advanced scouting. And among our 100 plus guests here today, I understand that only 2 are SCC graduates. I'll reserve any judgments on that fact for the moment. However, in light of that information, I thought a quick review of SEC geography and membership is only appropriate. So the Southeastern Conference Schools span across 11 contiguous states.
There are 14 total schools that Comprise the SEC, including Alabama, Arkansas, Auburn, Florida, Georgia, Kentucky, LSU, Ole Miss, Mississippi State, Missouri, South Carolina, Tennessee, Texas A and M and last but not East Vanderbilt. Now I've spent the better part of the last year traveling the Southeast and experiencing almost all of those fourteen campuses. I personally have had a chance to take it all in. And if you haven't enjoyed a fall Saturday tailgating in Tuscaloosa, Athens, Georgia, Lexington, Kentucky or Oxford, Mississippi, you should add it to your bucket list. It's a powerful and eye opening experience.
It's a must for anyone seeking a collegiate fountain of youth, and it's unlike any college experience in The SEC is unique and it is special. Now many in the room are familiar with the Big 10 network. They launched in 2 1,007. And despite some early hiccups and challenges, they ultimately achieved both distribution and financial success. Now we believe the passion among SEC fans and the SEC athletic performance is superior to any conference in the country.
We're optimistic and enthusiastic about the opportunity front of us. So the game plan for today is to dive into this area into this and cover it in a more deep fashion in 3 ways. First, we want to show you why we feel so strongly about this opportunity. And we're going to do that in the context of the overall 2nd, we're going to demonstrate how we're going to succeed in this space by highlighting the core tenets of our content plan. And third and finally, we'll review response and traction among fans, distributors and advertisers.
So let's start by talking about the marketplace and the source of as a whole has become the 2nd most popular sports category behind the NFL. And the biggest driver of college sports is the interest in college football, which above every other professional league except the NFL, in total fans and most importantly among avid sports fans. So let's take a look at where avid fans live. While there are pockets of avid college football fans or fans throughout the entire country, in the Southeast, college football fan avidity is off the charts, particularly in those states with SEC schools. And that fan avidity translates into ratings and viewership to crack the top 10 outside the SEC footprint.
And likewise, if you dig a layer deeper, when you look at how college football games featuring teams compared to those games featuring schools from all other conferences, the interest and leadership position is clear. On the ESPN Networks, games with SEC teams deliver more than double the rating for those games without an SEC team. The SEC's dominance in football is legendary. SEC Football is the closest thing to the NFL. The SEC has won 7 of the last 8 BCS National Championships.
And one of those games for the 2011 championship actually featured 2 SEC Teams playing each other. This past year, Auburn was less than 2 minutes away from making it 8 in a row for the SEC. The college football measuring stick is chiseled in the SEC. Yet if we focus only on football, we'll miss the bigger, more impressive story. SEC's dominance, success and strength across a broad range of sports is unrivaled.
Since 1,000, the SEC has won 87 total national championships, 46 men's titles and 41 women's titles. The interest in sports across all categories also translates into ratings and viewership beyond college football. Across ESPN, on a total day rating basis, 8 of the 10 highest rated DMAs are in SEC country. Now you've heard a lot today about the power of the ESPN brand. ESPN is the most well known brand in sports.
It is more recognized than brands like the Olympics and the NFL. Well, we are marrying together the most well known brand in all of sports with the recognized leader in college sports. When self identified college sports fans were asked, whom do you consider to be the leaders in college sports? The SEC was mentioned 27 percent of the time ESPN, 21 percent Alabama, an SEC school, was 3rd, mentioned 17% of the time And the Big 10 is 4th, with mentions 15% of the time. We are drawing on the strengths of the SEC and ESPN.
We are bringing together unprecedented quality and expertise to launch the SEC network. And so now I want to introduce to you Stephanie Drewley. Stephanie is the Vice President of Production for College Networks. And she's going to lay out for you the core tenants of our content plan.
Thank you, Justin. I came to ESPN fresh from the University of Texas 24 years ago. And in Texas, we're football. And I've been lucky enough to make a career out of it covering the NFL for 16 years before launching the Longhorn Network 3 years ago. So it's fitting that my next step is to launch a network for the most passionate football fans in the country.
I'll highlight the keys in our plan and I'll get some help with from a few others along the way. 1st and foremost, we'll extend ESPN's mission to serve SEC fans anytime, anywhere. We'll surround them with content across platforms, mobile devices, tablets, PCs, so they can take it all in wherever they might Our content focus will be on events. In total, we'll air over 1,000 exclusive live events in year 1, we will do over 4.50 events on the television network and another 5.50 plus exclusive events the network's digital platforms. We'll cover the full breadth of SEC sports, basketball, baseball, softball, volleyball, soccer.
If the SEC competes in a sport, we're going to cover it. At the same time, we're going to make a big priority of During college football season, every Saturday, we'll feature a tripleheader exclusively on the SEC network. In total, we'll air over 45 exclusive games. Each weekend, we'll feature games at noon, 4 and 8 p. M.
We're also going to launch the college football season with a bang. On August 28, we'll have a doubleheader of SEC action. Texas A and M will play South Carolina, a key conference matchup with national championship implications. In a later window, Temple will visit Vanderbilt. Rarely do SEC teams play on Thursday.
But on this opening Thursday, we'll have 3 teams who were ranked in the top 25 to close out the previous season. And it's not just about big games for us, it's about big names. A legendary voice in college football, Brent Musburger, will call our premier game every week. Brent called the national championship game in January. And in August, he'll call Texas A and M in South Carolina on opening night.
Joining Brent in the booth will Jesse Palmer. Jesse has been an analyst since 2007 for ESPN. And for the past 6 seasons, he's been in the booth for night primetime game. Jesse has SEC roots having spent 3 seasons as the Florida quarterback. The caliber of the booth that we've put together speaks to the commitment to quality that we're making for the SEC network and that commitment will be seen every Saturday morning when we launch SEC Nation, a weekly pre game show from a different SEC campus.
We're going to provide the best storytelling, insight and analysis for the games that and bring the SEC tailgate experience to the fans at home. A familiar voice on ESPN, Joe Testor, he'll be our Host for 2 hours. Joining him will be the 2 gentlemen I'd like to introduce to you now. The New Yorker dubbed Paul Feynbaum the voice of the South. And for the past 24 In August, Paul's radio show can be seen on SEC Network 5 days a week from 2 to 6 Eastern.
And Tim Tebow, I'm not sure there are many people who don't know who Tim Tebow is, but I will remind you that he won 2 national championships and 1 Heisman Trophy at the where he predicted that Florida State would win 35thirty 1. Tim was wrong. Florida State won 34thirty Please welcome Tim Tebow and Paul Feidman.
I look young in that picture.
Damn.
I do. I like it. Those are my better days, my younger days. How are we doing?
Stiff room, tough room. Gosh,
how are we doing? That's what I'm talking about. I like it.
All right.
Thank you, Tim.
All right, Paul, you're up.
All right. Paul, you I'll start with you first since Tim's gotten the first word in. You made a career in the SEC you have a new book coming out in August, My Conference Can Beat Your Conference. What makes your conference, the SEC, so unique?
I think if you look at the picture, that is a cover shot. We had fans come to Tuscaloosa on a very cold November morning from all over the country at their own expense they wanted to experience this cover shoot and be on the cover of hopefully a best selling book. The SEC is unique for a lot reasons. I think perhaps the most important is the fact that in the South, there are not many professional sports. This isn't New York where you have 2 teams of every kind.
And the fans take ownership. This Saturday, I'm going to be in Tuscaloosa for a spring football game. That means you divide the teams up and play each other. Alabama officials are expecting 100,000 fans Saturday, and that would break the record of 92,000 held by Alabama. Alabama is unique.
I've spent most of my career there. It's not uncommon for children to be named after the legendary coach, Barrett Bryant. One person I know tried He actually named his older daughter Crimson Tide. And his wife stopped him when he wanted to name the younger daughter Ali, a l l A wide Bama.
It's not what we're most proud of in the South, but
He, by the way, he
was This
is the passion.
He did win the battle to name his dog, Nick Saban.
Tim, you've had a unique experience that not many people get to have. What's it like to play on Saturday at an SEC Stadium.
It's just not a game, it's a way of life. I don't know how I can explain that. It's just when people go to support you, they come to your games, They're not coming to hope you win or we're going to go support the team or clap them on or like when the Rose Bowl, when your team scores, give a nice little like soft clap. Like they're going crazy. They're living and dying with this.
And I know because I grew up that way. You know, my grandfather, it was his dream to see Florida win an SEC championship and he passed away before that could happen. But every time my grandma would come to a game, she Say, you wouldn't believe how happy your grandfather would be if he could be here. Like, you just don't know what it would mean to him. My parents' first date was at the Florida game, you know, where it's red and black and it's orange and blue split right down the middle and it's the most intense environment you'll ever be in.
But as a player, you don't want anything When we go to a gator walk before a game or we're going into the swamp, where no one else likes to really come, because now that they don't get wins there, but when we're walking into it, I wouldn't be surprised if I'm shaking everybody's hands and I see 2 or 3 guys with, you know, my face tattooed on their shoulder. Like, it's These people really love this game and they're passionate about it. And it's just different. You know, we got to play other conferences and go and I've been able to play around the country on different teams and there's just not a place like it.
So you had the Florida experience. Paul spent most of his time in Alabama, so he knows those fans really well. Paul, you've heard a lot Alabama story, you just gave us a couple, but what's the one that sort of impacted you the most?
Well, there's a family in Birmingham, the Rees family. And Mr. Reese was trying to attain the record of having attended the most consecutive Alabama football That streak started in 1946 and finally ended in 2012. He was fell by a bad case of flew. So I think it stopped somewhere in the 700s.
But he's not known for the games he attended. He's known for A wedding that he missed, I think you can figure out where I'm going. In 1993, his daughter decided to get And this family, the family, Betty and Fletcher said, do not get married during the football season. She, like some children, resisted. And she decided to get married on the day of the Tennessee game.
They did not go to the wedding. They went to the game, but They did get to the church in time for the reception. And the most important part of the day, Alabama won.
So Tim, just one last thing. So tell us what it's like to be a player in the FCC to take the field?
Well, every game is so big. Every team thinks Dear their rival, but really you only have a few real rivals. And for us, those top three rivals were Florida State, Georgia and Tennessee. You know, ever since I was a kid, if we would win, I couldn't wait to go somewhere and tell people, if we would lose, I would beg my parents, please don't make us go to church tomorrow because I don't want to have to face all the opposing fans. And for me, probably like my greatest accomplishment or something I'm most proud of because it means the most is that I was 11 and 1 versus my rivals because those games mean more than anything else.
They mean more than the Heisman Trophy. They mean more than championships because in the South, that's your legacy. It's what you did versus your What did you do versus Georgia? What did you do versus LSU? What did you do versus FSU?
Those games mean more to the fans of the
Well, you got some of those too though. So I would thank both of you, Paul and Tim. Thank you very much.
Thanks, Chad.
Thank you,
guys. As a reminder, our SEC Nation debuts in August and that's just a little under 4 months away.
So there's a little bit of
work to do. The final piece to the content puzzle is storytelling. In addition Ongoing player profiles and features on the network. We're going to expand a franchise that ESPN Films Group has built over the past We're doubling our production of SEC storied features. The incremental films will debut exclusively on the SEC network.
And before I leave you, Justin and I wanted to a sample of a recent SEC storied film that aired that captured the essence of this brand and the stories that we aspire to tell.
Hey. Who's your favorite football
My dad.
Your dad's your favorite football plan too?
Well, you're on the right track.
You're going to be a football player when you grow
up? Mhmm.
I don't like the perception It was a plan. I was an NFL quarterback, and now I've got these boys and I'm going to mold them into being NFL Quarterback, not so.
They didn't drop back and throw Cook 1.
I wasn't necessarily trying to expose them to it. I was just trying to great father son relationship. That's what I want.
Quarterback Archie Manning. Mr. Manning, the pride of Grouh, Mississippi, is made number 18 mighty faith.
I'm kind of rolling along, playing college football, enjoying life, and all of a sudden, bam. I had to be a man. Number 1 picks in the draft, Win Super Bowls, MVP. Yeah. We pinch ourselves.
Now needless to say, there is a deep well of stories waiting to be told on this network. And our efforts are actually bearing fruit among fans, distributors and advertisers. SEC fans are among the most dedicated in all of sports, as you just heard. There are approximately 4 130,000 students enrolled at SEC Institutions and over 3,000,000 total graduates. SEC fandom lives in all corners of US.
And both SEC fans and fans across the country have told us that they want the SEC Network. We asked self identified college sports fans if they want the SEC network and hands down, it has national appeal. Across the country, approximately 75% of people said that they would like their TV provider to add the network. And certain large distributors have already acted. 4 months prior to the launch, we have both AT and T U verse and DISH Network on board.
We will continue to use the time prior to to build on this early success. Likewise, we have a series of advertisers and sponsors already committed to the network. This is just a cross section of both national blue chip advertisers like Doctor Pepper, Allstate and AT among others, and a growing list of regional players like Belk and Regions Bank. They all understand power of connecting their brands with the upcoming network and this list is growing. So I want to thank you for the opportunity to share And we look forward to having all of you take it all in this coming August.
Now we'll leave you with one last glimpse into the spirit of the SEC.
That's great. And I hope that entire presentation gave everyone in the A sense of why we are so excited about the launch of this network. I hope you enjoyed hearing from Tim and from Paul. I love that people have his face tattooed shoulder. It's quite remarkable.
And listen, Paul's book is coming out in August. And I'm delighted to tell you that everyone in this room when it was released will be getting from us a digital copy of Paul's book so you can learn a bit more about the SEC and the passion and culture of the conference. In a minute, Jay Rasulo, our Chief Financial Officer, is going to come up and he's going to wrap up the day. Before that, I hope that during the day, you got a sense of the importance of SportsCenter to ESPN. Over the years, we've supported the franchise with our incredibly successful Vista SportsCenter campaign.
And we thought you would enjoy seeing a few of the spots we've run over the years, including one you may have missed.
Okay. So it's pretty obvious that doing commercials is not in my job description. What is in my job description though, as is certainly Lowell's and Bob Igers, It's talking to all of you about the great parts of our company and how you can think about them. But that is not in the job description John Skipper and his management team here at ESPN. And they I hope that you will all agree that they did A terrific job in delivering to all of you, how they think about their business, where the value comes from.
So please join me in giving them a huge hand for So Bob mentioned when we kicked off this morning, the ESPN has been an important driver of the growth in our cable businesses. Over the past 5 years, cable operating income has grown 8% on a compounded annual basis, as he showed you. These results have been a huge contributor to the strong growth in the overall earnings per share during this period of time. Today, you heard a lot about the ESPN business and strategy. As you know, we don't break out ESPN's financial results.
So today, I'm going to provide some insight into the financial for our cable business. We've renewed deals with 8 of our top 10 affiliate partners, and we expect to complete the last two deals by the end of this calendar year. These are long term comprehensive deals, and we expect them to drive high single digit compounded annual growth in domestic cable affiliate revenue through 2016. ESPN's programming costs constitute the majority of the total programming costs for the cable segment. And since ESPN's key sports rights contracts are in place through 20 manage non programming costs across the cable business.
And over the next 3 years, we expect them to grow at a rate meaningfully below the growth rate of our programming expenses. Given this and assuming a relatively stable Group. Due to the timing of the affiliate contract renewals, new sports rights contracts and other comparability items, annual operating income growth may be above or below that compounded rate during any year during that period. Let me discuss some of the factors based on what we know today that will influence the results in 2014, 2015 2016. In fiscal 20 Team, we have the 1st full year of our Major League Baseball contract.
You'll also see a partial impact of our new NFL contract in the Q4 of the year as the season gets underway in September. And as we mentioned during our Q4 call, we expect the impact of these new contracts to drive high single digit growth in cable programming costs for fiscal 2014 with the increase predominantly in the second half of the year. In fiscal 2015, you'll see continued impact from our new NFL contract during the Q1. In the 2nd fiscal quarter of 2015, our new deal to broadcast the college football playoffs will take effect. Also in 2015, our results will benefit from a 53rd week.
If you recall, due to our accounting calendar, we have an extra in our fiscal year approximately every 6 years. In fiscal 2016, our results will comp against the benefit of that 53rd week in and the preeminent sports media entertainment business. What you saw here today and what you Every day, whether it's on your television, your radio, tablet, PC or mobile phone, is the product of a 35 year History, a culture of innovation and countless hours of hard work and dedication from an incredibly talented team of individuals who are passionate about sports and about storytelling. While the financial outlook I just provided pertains to the cable business a whole, I'd like to summarize the key takeaways from the presentations you heard about the ESPN business today. These are what I think they are.
Bob started the day out by stating that like Disney, ESPN is a franchise driven business. We believe this strategy has been very successful and positions us to continue to deliver strong financial results. ESPN is committed to serving sports fans anytime, anywhere. This simple yet powerful in sports multimedia television and is well positioned for the foreseeable future. Landscape and while we take the competition very seriously, we're confident in our ability to sustain and even our strong leadership position.
Our confidence is due to a number of factors, of which the strength of our sports portfolio is 1. Simply put, we hold the deepest and broadest set of sports rights by a long shot, which further strengthens our position in the marketplace. And it's not just about sports rights. ESPN's To create compelling content in and around the game is unrivaled. Whether it's franchises like College or pardon the interruption, viewers recognize ESPN is the home of both marquee sporting events and the destination for comprehensive news, information and analysis after the game is over.
You got a sense today for the technology infrastructure that powers ESPN. We've made investments over the years in assets and people to ensure that ESPN is always at the forefront of technological innovation. ESPN's culture of Technology can't be easily replicated and it's a significant competitive advantage. Our focus is on serving sports fans With the deepest and broadest content in sports, this has led ESPN to We continue to invest to further strengthen our relationship with fans. ESPN has enhanced the value of across devices wherever they are.
We work in close partnership with multichannel operators to enhance the value of the multichannel subscription through innovation and the delivery of products and services that consumers demand. Increased digital and mobile consumption of the SPL provides a meaningful revenue opportunity. And once we have 3rd party cross platform measurement in place, we believe this will unlock an even greater monetization opportunity. We're capitalizing on a number of growth opportunities, which include a growing multimedia business in Latin America and digital businesses around the world. Also, we see tremendous opportunity presented by the popularity of college sports and the strongest brand in college the SEC.
Justin and Stephanie gave you a sense of why we're so extremely excited about the launch of the SEC network. And finally, we feel very good about the long term growth prospects for our cable business. As I mentioned earlier, we expect high single digit compounded annual growth in both cable domestic affiliate revenue and operating income through 2016. I hope you found the day productive,
have
a greater appreciation for why we feel so incredibly good about ESPN, its competitive position in the marketplace and our financial outlook. With that, I'm going to turn the floor back to Lowell and he's going to lead us through a Q and A session.
Thank you, Jay. I just want to make one thing clear, because someone has already asked me on the growth forecast. The chart said 'fourteen through 'sixteen. Those are the 3 years forecast. Obviously, 'thirteen is the base year for that, so just so everyone's clear on that.
So Jay and I are going to be joined on stage right Now by John Skipper, who you heard from earlier and by Christine Driessen. Chris is the CFO of ESPN, a role she's held for 20 years. She's been with ESPN for 28 years, joining in August of 'eighty 5 as ESPN's controller. And I just want to note On a personal note, since I joined Disney 7 years ago, Chris has been an unbelievable partner for us in Investor Relations and a great support to everything that we do in our efforts to try to better inform the Street. So we appreciate that.
We're going to try to take as many questions as possible in the time that We obviously have a bunch of our talent waiting for cocktails, so we will try to get through some questions before we head down there. We do have a bunch of people webcast can hear you. And let me apologize in advance. We won't have time to get to all the questions, but we will try to get to as many as possible. So with that, Let's start with Mr.
Swinburne in aisle 4 on the left. Do me a favor also, just give me your name and firm name so people in the room and on the webcast can hear you.
Sure. Ben Swinburne from Morgan Stanley. Can you guys talk about your vision for what the personalized subscription service is going to look like from a consumer perspective
other than streaming and personal as the name suggests. And how did you get comfortable that that's not going to be something that might cannibalize the core pay TV business?
We do not think that's a substitute for the core pay television business. As it suggests, it's a personal subscription. We believe, as Sean said exactly that, It's an on ramp for people who don't currently have the service, not a trade down for people who do have the service. As it rolls out through DISH, I think You'll understand even more clearly why that's not the case, but we do not fear that consequence.
And needless to say that in the deal, there are many elements, some of which we can got some of which are really DISH's to discuss that give us some comfort.
And I was just curious, is U verse
and DISH fully distributing SEC Network nationally?
Yes.
Thank you.
I should also note that every executive who presented today has rejoined us. So if there's a question that we want to go to them on, we have that capability. Someone in the back has their hand up. I can't see who it is, but let's bring a mic back there.
It's Barton Crockett from FBR. You there's a couple of big unknowns in your outlook over the next 3 years. One is the timing and the level of carriage for the SEC network. The other is the NBA kind of programming negotiations. I was wondering if you could give us some parameters of How much impact various kind of likely scenarios for those things could have on your forecast for the high single digit operating profit?
So let me start out by saying if I heard everything you said, Barton, I don't know for some reason mics don't carry Let me start out by saying that in that outlook we gave you, it did include all those growth opportunities you saw us present today, including the SEC network was included in that. And you heard because of all the factors that Justin and Stephanie shared how confident we are as to ultimately getting carriage on the SEC network. So we've rolled it into our numbers. We're pretty confident about it, and you can assume that that is in there. On the NBA, We've talked for a very long time about how we think about sports rights.
You've seen the net result of what, For lack of a better term, and I think John even used this earlier today, is a portfolio concept about just like you guys women manage portfolios and you'd like to own everything in the world, but you pick and choose among what you think are to be the key drivers. We've got 2 properties that John showed in his presentation that are not part of our long term portfolio and we will deal with acquiring those as we have with everything with a sense of financial discipline back than that. But I will say for the growth numbers we gave you, the NBA won't be part of that because the NBA renewal will start after 20 16. So
Yes, both the NBA and the Big 10 would lie outside the scope of 14 to 16. And the only thing I'll say on the SEC Network, as you saw, the quality of content, we are highly confident in our distribution prognosis for that.
Sure. Let's go to this side. Michael Nathanson,
Road 3.
Thanks. Michael and Nathan. Jay, you mentioned in your summary that one of the issues facing you is just a better measurement System for online ratings. So I wonder maybe for John or for Ed, how much of a gaining factor has it been not To have Nielsen rating cross platform,
I know later this year
it's coming. So if you talk
a bit about maybe how big you think opportunity could be in any examples of it holding back dollar growth?
I think John Well, you clearly see how significant think it can be by the fact that we started doing it without waiting for anybody else. And it's just a question of the rate at which we monetize the opportunity we have. We have such a lead. It's very important for us to get the measurement, to get the opportunity. You saw Ed talk about the fact that already 22 of our revenue is nonlinear and that had I think I can't remember exactly the growth rate we over the last couple of years was 10%.
No, no, the growth rate of the nonlinear business, 23% growth for that 22 Clearly, we can accelerate that kind of growth if we can get the measurement.
David Miller here, row
Question for John. How are you doing? I hope well.
I hope we're very well.
Nice to meet you. Thank you. So with turning to the Big 10, the Big 10 contract which comes up in 2017, how do you think about that negotiation? And obviously, we have a few years here, but how do you think about that negotiation in light of potential Big Ten expansion beyond the 14 teams that exist Food to poach additional ACC teams. We've already seen that with Maryland going to the Big 10.
The SEC is rumored to want maybe Duke in North Carolina, the Big 10 wants Virginia because it's a land grant university, it's kind of fits in academically, whatever. If there's expansion there on both those offs, if you will, how do you think about those negotiations? And how do you think about the ACC? And you're right there, if the ACC becomes
Look, it's a profound it's been one of the more interesting things happening in the COGS landscape. It's a fairly profound matter for us and I'm happy to tell you that the 5 conferences, major college conferences, their members are pretty locked in. In the deals that we have, There are grants of rights. I do not expect there to be movement from the ACC out of the ACC into the Big 10 into the SEC. We are not responsible for I mean, I can tell you those schools are pretty locked.
And again, we don't expect any big movement. We have been record as referring there not to be movement. And I don't think there will be significant movement. I think it is quiet for the time being. I don't expect the conferences to expand.
Let's go, Jessica. See you back there.
Jeff Reeb Cohen from Bank of America Merrill Lynch. I just want to go back to the OTT service. It took you a long time to Reach of deals, so obviously, you guys were very thoughtful about it. Is this the blueprint for more deals? Do you expect more OTT deals?
Can you give us color on the things that you were looking for? And how do you actually price, I don't expect the number, but how you priced versus the linear service how price versus a linear service when you're breaking up your own bonds all. They don't have to take the full suite of ESPN channels.
Well, the first thing I'll speak to is, Jessica, to your point about the time that it took to get the deal. We were quite anxious, Again, as we pointed out before to have this happen in a negotiating room, do not go public with interruption of service because with all the sort of Sturm and Drang the atmosphere, we wanted to avoid that. So that's the reason for the length of time. It wasn't really about the personal subscription service. We do believe that we will you heard me say that we will continue to experiment with new business models.
So I don't think this will be the last over the top deal we do. Whether it's a model, I don't know. We'll talk, as Sean pointed out, to all distributors about how to create value. And again, we don't comment on the price, but we've been very clear that we value the relationships we have, we value the cable television subscription and you cannot expect to see us undercut that.
I think it's also important to know in that deal, Our most important networks are part of that service if and when they launch it. So it's not as if we were giving them a bundle. Most of the rate is captured in that deal across our network. So I think we feel very good about that offering.
And I don't think you can talk about it as an OTT of an MVPD full service provider. And as we did with Comcast, I've told you all many times, there were 70 separate services. Some of are very different from what has become part of this DISH deal. Every one of those negotiations is somewhat different and they are negotiated, however, in context of one of the tenants that I think I even mentioned in my wrap up, which is we want to continue to create value for the end Consumer of the MVPD infrastructure and this was one of those examples. I agree with John, it's very unlikely to be the last.
We only
Mike Morris with Guggenheim. My question is on advertising, a couple of things. Can you help us with what type of advertising growth is implied in your guide for the operating income and the affiliate outlook? And then second of all, are you seeing you talked about the strength of sports programming and its unique qualities. Are you seeing pricing on average for sports related programming above that for entertainment related programming and or are you seeing a trajectory that pricing for sports is growing faster than for entertainment?
Thank you.
Okay. So let me try to address So first on the first question, Mike, I think we provided today the outlook that we're going to provide, which I think is a big step for us
because we don't generally provide it.
But I think we provided, but I think we want we have some visibility into affiliate revenue and we have some expectations for how we can grow the business. I don't think we're going to get into the specifics of what our advertising outlook is. But I think if one were to infer from Ed's presentation that we are confident in our ability to grow that business, I think that would be a reasonable inference to draw. I think the historical performance of our ad sales group been spectacular. And we've talked about all the reasons why we think ESPN is a great place for advertisers to be.
On the second question, We actually looked at this recently for some work we were doing in corporate and it's a very complicated answer. It comes down to it depends. I will tell that we are seeing great pricing power on sports in general for all the reasons that Ed laid out. A lot depends on what show you're comparing it to, But there are clearly there are advertising opportunities on ESPN where we can charge CPMs that are at rates that would be at the high end of what seeing in the entertainment industry, there are other things that are sold at rates below the average in the entertainment industry. Remember, we've Multiple networks, we're selling 20 fourseven, tremendous amount of live programming.
So I think it is a very complicated answer. And I think you should know that we're obviously pushing as hard as we can on the rate side.
Alan Gould from Evercore. John, can you tell us what impact you think the change in the BCS Yes, has on the network, the ratings, the fan, I mean, what are we going from 3 games to 7 games? And Jay, can you give us some idea of the economics, the extra costs? Is there Sponsorship, obviously the advertising will come with the ratings.
If you remember before, there were 4 James embedded, there were 4 bowls and 1 championship game. So we're going from 4 games and 1 championship game to 6 and a championship game. So it's been the addition of 2 games. In addition, 2 of those 6 are semifinals now, right? So you kept the 4 bowls, I did 2 semis and then got the championship.
We think that the ratings impact will be pretty profound. You heard me say, I think that I think it will be the 2nd most important sports day in the calendar after the Super Bowl. So we think it's fairly profound.
I'm not going to give you guidance obviously on the economics of that.
First of all, I
think as we've said many, many times, First of all, I think as we've said many, many times, it never makes sense at ESPN. And I think what you've seen today supports that to talk about any weekend square peg that you buy to fit into fit a strategic because you're talking about overall Stickiness to and value to affiliates, stickiness to consumers and it's a portfolio. But I'm sure that Chris can Take you through the components that we look at, when we make a purchase like this and obviously make the evaluation as to what we're willing to pay and how it works?
So we look at the value to our affiliates, first off, and we look at also then advertising not only within the 3 hour window of the game itself, but the lead in for that day's studio shows as well as the impact SportsCenter. So, we look at all that. We are pretty tight on our production. So, that's a number we feel really comfortable about, given many years we've done doing this. This championship game will be a little bit different because of the visibility.
So, we will obviously factor that in we think about our production and scope of production. But we look at all that at the end of the day and then we get comfortable and work very closely with Ed's team on Where we want to put pricing on CPMs, sell throughs, ratings, all the guarantee on that and it all rolls up into the final P and L.
You did hear Ed say that you'd expect to hear about a dozen announcements in the next 90 days relative to sponsorships.
Let's go David, is that you? I can't say. David Bank.
Got an existential question. Is that you, David?
So there's been a lot of chatter. There's always a lot of chatter. I think about the high cost of sports programming
as a portion
of the overall MVPD sale and what how it pressures the consumer. And I think you've really well the fact that that seems to be more chatter than reality because subscriber trends have been sort of unimpacted. It's almost a It's like a phantom problem. But I do think historically you've allowed the MVPDs to offer lower priced tiers without sports programming. And I'm wondering if that carve out has evolved over time, whether or not it's being used.
If you look at this round of affiliate agreements, you just did 8, you got 2 more left. The ones before that, were the carve outs materially different or different or the trends in the carve out for the lower priced tier basically kind of the same that we've seen?
Look, we do our deals, the previous era and this era under a set of NDAs and I don't I want to talk about the details of the deal. But I think that what you heard from Marty, what seems to be the case is that to the that we see smaller packages that exclude our product, we believe that and we've been Told by the MVPDs that this is fundamentally due to economic circumstances that they believe and have told us are temporary. They want to keep the family, the household in the system with the hope they tell us of getting back to full service. So there hasn't been to Artie's point, what we see in the decrease in subscriptions has been fractional. You saw the data he presented.
I don't think I have to repeat it. And I don't want to talk about How our deals changed between the last time and the first time because I don't think it's fair to our partners. And so I hope that gives you some
Hi. I'm kind of losing my mind with age. But John, my recollection is D. C. 1, it cost about 100,000,000 which we amortized over about 10 years.
So you own that free and clear. So going to the cost of this facility, I'm going to estimate $300,000,000 I'm interested in 2 things. 1 is, I thought the tour, they said that it was going to be up and running 70% and they were having issues figuring out when they're going to upgrade the rest. Using my estimate of $300,000,000 does that mean I have another $100,000,000 to spend or I have another 30% to spend? And then, Jay, amortization, Is it hit the P and L already, the cost of this building, which I know substantially done or does it come in kind of evenly over 10 years?
I'm going to let John talk about the timing of it and whatnot. But let me 1st of all, DC1, There's nothing static in the technology world, right? So DC-one, just because it was built 10 years ago and whatever that number is, I don't know it, so I don't to tell you that it's right or wrong. But whatever that number was 10 years ago, there's been lots of stuff added to it. You know that when you build a facility There are some aspects of it, the technology side of it that depreciates very rapidly.
There's the building and etcetera, pre improvements that depreciates more slowly. But having said that, and I'm not going to give you any guidance on your $300,000,000 Could be high. There's an over and under. We can take a poll here. But the simple fact is that it has not it's not put service today I don't think counts.
And when it is, which
is John
will tell you when, then we will obviously start to depreciate I will tell you that the vast majority of the investment is behind us. And as you can imagine, it takes to put together a studio like this far exceeds what the fit out of the studio itself is ultimately. So the vast majority of the spending, there's not a third of the spending or half of the spending left to go. Yes.
We will do our first sports center from The new sports center set you had a chance to see on May 26th, coming out of an conference championship, NBA conference championship Game. You'll see us use the NFL studio August?
August.
Mike, what? September. September, John? September, the NFL studio September. Fully operational by?
September. By September, I mean the whole facility? Yeah. You did hear Mr. LaBerge say it is built to never become obsolete.
So we'll be using it for a long time.
All right. We're going to take 2 questions. I see Tuna here. So let's go to Tuna.
Thank you. So Tuna will be S and P Capital IQ. I'm trying to understand here ESBN International, it sounds to me that this can be a much bigger business than the $1,000,000,000 revenue that you're doing today. I know that you kind of paid back your operations in Asia. You have some challenges in the UK.
So clearly, you're focused on Latin America. And I'm just kind of wondering what are the barriers to Growing this international business and how big you think that it can get? I mean, is it a question of the rights issues in of these countries and talking about that, there's been a few assets on the international marketplace that have come to market, sports assets, and I'm not sure if you guys are kicking the tires on those and how you view the overall international Opportunity. That would be helpful. Excellent.
I think on Latin America, I think Russell was quite clear. We're very bullish that we will continue to grow that business At significant rates, I believe it was 45% CAGR over the last what was that Russell, 5 years?
5 years. And the barriers are the continued factors that Russell laid out, right?
Growth of factors that Russell laid out, right? Growth of that Russell laid out the income growth in the region, the growth of multi channel subscribers, our ability to negotiate deals with new increases to get more subscribers, we expect all those to continue to grow. And we believe that the model we have in the U. S, the multi platform using sports center as a flagship that those things all work. We and it is We took resources and moved them to Latin America because we believe that is the most immediate and the most significant opportunity we have.
In Latin America, but outside of Latin America, where do you see other opportunities?
We think that's going to be in digital And while Russell laid out quick info, we think ESPN FC is a real opportunity. We have grown from the 18th largest soccer site. What was that, John? When did we change the FC, John? November 4th, we were the 18th largest soccerfootball site in the world.
We're now the 4th largest in the world. So we think that's a fairly significant growth opportunity. We're going to look for other places to do sports center, news and information, look for us to think about other kinds of partnerships and opportunities.
Just real quick, any color on the margins,
It's a complicated
story. First of all, I'm not going to tell you what the margins are. And if I've told you once, I've told you guys a million times, that is not how we run our business. You guys are somewhat and ladies are obsessed with that. We are not obsessed with that.
We are obsessed with the growth of the income of our business. Having said that, remember, there's a mix of some equity interests internationally and some directly businesses. So even if I told you the number, you wouldn't be able to make sense of it in one way or another because it is a mix of those two business models.
I can confirm that they're pressures for growth, not margin.
All right. Let's do one more. I see a hand up, I don't know, 5 rows back. Yes. Is that Will?
Okay.
It's been a very impressive day. I'm curious, John, if you could Describe the advantages and disadvantages of being part of a large corporation like Disney? And secondly, if you were an independent running independent company if you could be doing anything differently than you are today. Thank you.
I'm highly satisfied to be a division of Walt Disney Company, let me emphasize, I'm highly satisfied. Look, it's I was at the Walt company when they bought ABC Cap Cities acquiring ESPN. And I had the opportunity to move over in 1997. The company has been transformed since 19 '97 because of the investments, the capital, the resources that the Walt Disney Company has been able to put in to ESPN. And nobody at ESPN, my is very similar.
You heard Bob talk about franchise focus. You hear Bob talk about integrity. You hear Bob talk about innovation. You hear him talk about being flexible, being nimble minded and that suits our culture and that's part of what we want Relay today is what kind of division we are and how we think about doing things. And you heard Bob talk about how he thinks of it fitting And the Walt Disney Company, we're a very comfortable fit.
And while I was having fun with the answer to the first question, it's also a genuine answer. So thank you.
I'll remind you, Will, Obviously, when you get up with the user interface, like we're at today, ESPN and Disney look very Different, ABC, they all look very different. Somewhere down in the stack and particularly remember when you are dealing in a MVPD universe 1st, in which you enter with a package of assets that you would like distributed, we have a single unified team that does the negotiation of these 8 of 10 and soon 10 of 10 deals that you've heard about. And we think that we are able to share expertise and be better at that because of ESPN, because of Disney channel because of ABC and the other things that are involved in those negotiations. So there are definitely some shared benefits that, by the way, Disney franchises get and learn from what goes on technologically here and vice versa. So there's more than meets the eye.
I know at the user interface, it looks like these could be completely different companies, but we try from an enterprise perspective to take as much advantage as we can of the commonalities that occur somewhere down in the stack of running this business and the others.
Thank you, Jay. Thanks for the question. And thank everyone for their questions. I'd like to let everyone on the webcast know that this will be the